Correlation Between Blackrock Moderate and Franklin Mutual

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

By analyzing existing cross correlation between Blackrock Moderate Prepared and Franklin Mutual Beacon, you can compare the effects of market volatilities on Blackrock Moderate 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 Blackrock Moderate with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Moderate and Franklin Mutual.

Diversification Opportunities for Blackrock Moderate and Franklin Mutual

0.0

Correlation Coefficient

Blackrock Moderate  Franklin Mutual

Pay attention - limited upside

The 3 months correlation between Blackrock and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Moderate Prepared and Franklin Mutual Beacon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Beacon and Blackrock Moderate 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 Blackrock Moderate Prepared 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 Beacon has no effect on the direction of Blackrock Moderate i.e., Blackrock Moderate and Franklin Mutual go up and down completely randomly.

Pair Corralation between Blackrock Moderate and Franklin Mutual

If you would invest (100.00) in Franklin Mutual Beacon on October 7, 2024 and sell it today you would earn a total of  100.00  from holding Franklin Mutual Beacon or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Blackrock Moderate Prepared  vs.  Franklin Mutual Beacon

Blackrock Moderate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Moderate Prepared has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Blackrock Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Franklin Mutual Beacon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Mutual Beacon has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Blackrock Moderate and Franklin Mutual

The main advantage of trading using opposite Blackrock Moderate and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Moderate 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.

The idea behind Blackrock Moderate Prepared and Franklin Mutual Beacon 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.