Correlation Between Clearbridge Energy and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Clearbridge Energy 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 Clearbridge Energy and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Energy Mlp and Franklin Mutual Shares, you can compare the effects of market volatilities on Clearbridge Energy 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 Clearbridge Energy with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Energy and Franklin Mutual.
Diversification Opportunities for Clearbridge Energy and Franklin Mutual
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clearbridge and Franklin is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Energy Mlp and Franklin Mutual Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Shares and Clearbridge Energy 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 Clearbridge Energy Mlp 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 Shares has no effect on the direction of Clearbridge Energy i.e., Clearbridge Energy and Franklin Mutual go up and down completely randomly.
Pair Corralation between Clearbridge Energy and Franklin Mutual
Assuming the 90 days horizon Clearbridge Energy Mlp is expected to generate 2.68 times more return on investment than Franklin Mutual. However, Clearbridge Energy is 2.68 times more volatile than Franklin Mutual Shares. It trades about 0.05 of its potential returns per unit of risk. Franklin Mutual Shares is currently generating about -0.15 per unit of risk. If you would invest 5,149 in Clearbridge Energy Mlp on September 13, 2024 and sell it today you would earn a total of 60.00 from holding Clearbridge Energy Mlp or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Energy Mlp vs. Franklin Mutual Shares
Performance |
| Timeline |
| Clearbridge Energy Mlp |
| Franklin Mutual Shares |
Clearbridge Energy and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Energy and Franklin Mutual
The main advantage of trading using opposite Clearbridge Energy and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Energy 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.| Clearbridge Energy vs. Mid Cap Growth | Clearbridge Energy vs. Pace Smallmedium Growth | Clearbridge Energy vs. Ftfa Franklin Templeton Growth | Clearbridge Energy vs. Rational Defensive Growth |
| Franklin Mutual vs. Federated Hermes Conservative | Franklin Mutual vs. Global Diversified Income | Franklin Mutual vs. Western Asset Diversified | Franklin Mutual vs. Fidelity Advisor Diversified |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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