Correlation Between Franklin and Clearbridge International

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

By analyzing existing cross correlation between Franklin Government Money and Clearbridge International Value, you can compare the effects of market volatilities on Franklin and Clearbridge International 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 with a short position of Clearbridge International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Clearbridge International.

Diversification Opportunities for Franklin and Clearbridge International

0.0

Correlation Coefficient

Franklin  Clearbridge International

Pay attention - limited upside

The 3 months correlation between Franklin and Clearbridge is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Clearbridge International Valu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge International and Franklin 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 Government Money are associated (or correlated) with Clearbridge International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge International has no effect on the direction of Franklin i.e., Franklin and Clearbridge International go up and down completely randomly.

Pair Corralation between Franklin and Clearbridge International

If you would invest  1,012  in Clearbridge International Value on December 25, 2024 and sell it today you would earn a total of  126.00  from holding Clearbridge International Value or generate 12.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Franklin Government Money  vs.  Clearbridge International Valu

Franklin Government Money

Risk-Adjusted Performance

Very Weak

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

Clearbridge International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge International Value are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Clearbridge International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Franklin and Clearbridge International

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

The idea behind Franklin Government Money and Clearbridge International Value 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.