Correlation Between Franklin Mutual and Aquagold International

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

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

Diversification Opportunities for Franklin Mutual and Aquagold International

0.0

Correlation Coefficient

Franklin Mutual  Aquagold International

Pay attention - limited upside

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

Pair Corralation between Franklin Mutual and Aquagold International

If you would invest  3,169  in Franklin Mutual Global on September 4, 2024 and sell it today you would earn a total of  40.00  from holding Franklin Mutual Global or generate 1.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Franklin Mutual Global  vs.  Aquagold International

Franklin Mutual Global

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Mutual Global are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Franklin Mutual is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aquagold International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Franklin Mutual and Aquagold International

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

The idea behind Franklin Mutual Global and Aquagold International 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.