Correlation Between Franklin Resources and AssetMark Financial

Can any of the company-specific risk be diversified away by investing in both Franklin Resources and AssetMark Financial 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 Franklin Resources and AssetMark Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Franklin Resources and AssetMark Financial Holdings, you can compare the effects of market volatilities on Franklin Resources and AssetMark Financial 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 Franklin Resources with a short position of AssetMark Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Resources and AssetMark Financial.

Diversification Opportunities for Franklin Resources and AssetMark Financial

-0.38

Correlation Coefficient

Franklin Resources  AssetMark Financial

Very good diversification

The 3 months correlation between Franklin and AssetMark is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Resources and AssetMark Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AssetMark Financial and Franklin Resources 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 Franklin Resources are associated (or correlated) with AssetMark Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AssetMark Financial has no effect on the direction of Franklin Resources i.e., Franklin Resources and AssetMark Financial go up and down completely randomly.

Pair Corralation between Franklin Resources and AssetMark Financial

Considering the 90-day investment horizon Franklin Resources is expected to generate 0.03 times more return on investment than AssetMark Financial. However, Franklin Resources is 33.04 times less risky than AssetMark Financial. It trades about 0.15 of its potential returns per unit of risk. AssetMark Financial Holdings is currently generating about -0.5 per unit of risk. If you would invest  1,988  in Franklin Resources on September 2, 2024 and sell it today you would earn a total of  288.00  from holding Franklin Resources or generate 14.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	6.25%
Values	Daily Returns

Franklin Resources  vs.  AssetMark Financial Holdings

Franklin Resources

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Resources are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Franklin Resources displayed solid returns over the last few months and may actually be approaching a breakup point.

AssetMark Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AssetMark Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Franklin Resources and AssetMark Financial

The main advantage of trading using opposite Franklin Resources and AssetMark Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Resources position performs unexpectedly, AssetMark Financial 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 AssetMark Financial will offset losses from the drop in AssetMark Financial's long position.

The idea behind Franklin Resources and AssetMark Financial Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.