Correlation Between Qs Us and Franklin Mutual

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

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

Diversification Opportunities for Qs Us and Franklin Mutual

0.0

Correlation Coefficient

Qs Us  Franklin Mutual

Pay attention - limited upside

The 3 months correlation between LMSIX and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Qs Small Capitalization 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 Qs Us 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 Qs Small Capitalization 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 Qs Us i.e., Qs Us and Franklin Mutual go up and down completely randomly.

Pair Corralation between Qs Us and Franklin Mutual

If you would invest  1,482  in Franklin Mutual Beacon on October 7, 2024 and sell it today you would earn a total of  83.00  from holding Franklin Mutual Beacon or generate 5.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.2%
Values	Daily Returns

Qs Small Capitalization  vs.  Franklin Mutual Beacon

Qs Small Capitalization

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qs Small Capitalization has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Qs Us 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 Qs Us and Franklin Mutual

The main advantage of trading using opposite Qs Us and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qs Us 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 Qs Small Capitalization 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.