Correlation Between Wcm China and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Wcm China and Franklin Mutual at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Wcm China and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wcm China Quality and Franklin Mutual Global, you can compare the effects of market volatilities on Wcm China and Franklin Mutual and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Wcm China with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wcm China and Franklin Mutual.
Diversification Opportunities for Wcm China and Franklin Mutual
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wcm and Franklin is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Wcm China Quality and Franklin Mutual Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Global and Wcm China is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Wcm China Quality are associated (or correlated) with Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Global has no effect on the direction of Wcm China i.e., Wcm China and Franklin Mutual go up and down completely randomly.
Pair Corralation between Wcm China and Franklin Mutual
Assuming the 90 days horizon Wcm China Quality is expected to under-perform the Franklin Mutual. In addition to that, Wcm China is 1.93 times more volatile than Franklin Mutual Global. It trades about -0.02 of its total potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.05 per unit of volatility. If you would invest 2,828 in Franklin Mutual Global on September 12, 2024 and sell it today you would earn a total of 344.00 from holding Franklin Mutual Global or generate 12.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wcm China Quality vs. Franklin Mutual Global
Performance |
| Timeline |
| Wcm China Quality |
| Franklin Mutual Global |
Wcm China and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wcm China and Franklin Mutual
The main advantage of trading using opposite Wcm China and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wcm China position performs unexpectedly, Franklin Mutual can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Franklin Mutual will offset losses from the drop in Franklin Mutual's long position.| Wcm China vs. Vy Jpmorgan Emerging | Wcm China vs. Eagle Mlp Strategy | Wcm China vs. Origin Emerging Markets | Wcm China vs. Nasdaq 100 2x Strategy |
| Franklin Mutual vs. Qs Large Cap | Franklin Mutual vs. American Mutual Fund | Franklin Mutual vs. Virtus Nfj Large Cap | Franklin Mutual vs. Avantis Large Cap |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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