Correlation Between Kirr Marbach and Franklin Mutual

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

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

Diversification Opportunities for Kirr Marbach and Franklin Mutual

-0.03

Correlation Coefficient

Kirr Marbach  Franklin Mutual

Good diversification

The 3 months correlation between Kirr and Franklin is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kirr Marbach Partners 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 Kirr Marbach 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 Kirr Marbach Partners 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 Kirr Marbach i.e., Kirr Marbach and Franklin Mutual go up and down completely randomly.

Pair Corralation between Kirr Marbach and Franklin Mutual

Assuming the 90 days horizon Kirr Marbach Partners is expected to under-perform the Franklin Mutual. In addition to that, Kirr Marbach is 2.12 times more volatile than Franklin Mutual Beacon. It trades about -0.02 of its total potential returns per unit of risk. Franklin Mutual Beacon is currently generating about 0.16 per unit of volatility. If you would invest  1,560  in Franklin Mutual Beacon on December 20, 2024 and sell it today you would earn a total of  109.00  from holding Franklin Mutual Beacon or generate 6.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kirr Marbach Partners  vs.  Franklin Mutual Beacon

Kirr Marbach Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kirr Marbach Partners has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Kirr Marbach 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

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Mutual Beacon are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Franklin Mutual may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kirr Marbach and Franklin Mutual

The main advantage of trading using opposite Kirr Marbach and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kirr Marbach 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 Kirr Marbach Partners 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.