Correlation Between Tortoise Energy and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Tortoise 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 Tortoise 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 Tortoise Energy Independence and Franklin Mutual Shares, you can compare the effects of market volatilities on Tortoise 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 Tortoise Energy with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tortoise Energy and Franklin Mutual.
Diversification Opportunities for Tortoise Energy and Franklin Mutual
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tortoise and Franklin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Tortoise Energy Independence 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 Tortoise 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 Tortoise Energy Independence 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 Tortoise Energy i.e., Tortoise Energy and Franklin Mutual go up and down completely randomly.
Pair Corralation between Tortoise Energy and Franklin Mutual
Assuming the 90 days horizon Tortoise Energy Independence is expected to under-perform the Franklin Mutual. In addition to that, Tortoise Energy is 2.29 times more volatile than Franklin Mutual Shares. It trades about -0.16 of its total potential returns per unit of risk. Franklin Mutual Shares is currently generating about -0.15 per unit of volatility. If you would invest 2,874 in Franklin Mutual Shares on September 13, 2024 and sell it today you would lose (48.00) from holding Franklin Mutual Shares or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tortoise Energy Independence vs. Franklin Mutual Shares
Performance |
| Timeline |
| Tortoise Energy Inde |
| Franklin Mutual Shares |
Tortoise Energy and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tortoise Energy and Franklin Mutual
The main advantage of trading using opposite Tortoise Energy and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tortoise 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.| Tortoise Energy vs. Siit High Yield | Tortoise Energy vs. Calvert High Yield | Tortoise Energy vs. Artisan High Income | Tortoise Energy vs. Franklin High Income |
| 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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