Correlation Between Franklin Balance and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Franklin Balance 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 Franklin Balance and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Balance Sheet and Franklin Mutual Beacon, you can compare the effects of market volatilities on Franklin Balance 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 Franklin Balance with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Balance and Franklin Mutual.
Diversification Opportunities for Franklin Balance and Franklin Mutual
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Franklin is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Balance Sheet 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 Franklin Balance 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 Balance Sheet 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 Franklin Balance i.e., Franklin Balance and Franklin Mutual go up and down completely randomly.
Pair Corralation between Franklin Balance and Franklin Mutual
Assuming the 90 days horizon Franklin Balance is expected to generate 1.02 times less return on investment than Franklin Mutual. In addition to that, Franklin Balance is 1.15 times more volatile than Franklin Mutual Beacon. It trades about 0.03 of its total potential returns per unit of risk. Franklin Mutual Beacon is currently generating about 0.03 per unit of volatility. If you would invest 1,403 in Franklin Mutual Beacon on September 23, 2024 and sell it today you would earn a total of 157.00 from holding Franklin Mutual Beacon or generate 11.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Balance Sheet vs. Franklin Mutual Beacon
Performance |
Timeline |
Franklin Balance Sheet |
Franklin Mutual Beacon |
Franklin Balance and Franklin Mutual Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Balance and Franklin Mutual
The main advantage of trading using opposite Franklin Balance and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Balance 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.Franklin Balance vs. Franklin Mutual Beacon | Franklin Balance vs. Templeton Developing Markets | Franklin Balance vs. Franklin Mutual Global | Franklin Balance vs. Franklin Mutual Global |
Franklin Mutual vs. Templeton Developing Markets | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Global |
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 CEOs Directory module to screen CEOs from public companies around the world.
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