Correlation Between Franklin Mutual and Rbc Bluebay

Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Rbc Bluebay 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 Rbc Bluebay 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 Rbc Bluebay Absolute, you can compare the effects of market volatilities on Franklin Mutual and Rbc Bluebay 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 Rbc Bluebay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Rbc Bluebay.

Diversification Opportunities for Franklin Mutual and Rbc Bluebay

0.52

Correlation Coefficient

Franklin Mutual  Rbc Bluebay

Very weak diversification

The 3 months correlation between Franklin and Rbc is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Rbc Bluebay Absolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Bluebay Absolute 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 Rbc Bluebay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Bluebay Absolute has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Rbc Bluebay go up and down completely randomly.

Pair Corralation between Franklin Mutual and Rbc Bluebay

Assuming the 90 days horizon Franklin Mutual Global is expected to generate 0.53 times more return on investment than Rbc Bluebay. However, Franklin Mutual Global is 1.89 times less risky than Rbc Bluebay. It trades about 0.01 of its potential returns per unit of risk. Rbc Bluebay Absolute is currently generating about -0.02 per unit of risk. If you would invest  2,768  in Franklin Mutual Global on October 23, 2024 and sell it today you would earn a total of  91.00  from holding Franklin Mutual Global or generate 3.29% return on investment over 90 days.

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

Franklin Mutual Global  vs.  Rbc Bluebay Absolute

Franklin Mutual Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Mutual Global 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.

Rbc Bluebay Absolute

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rbc Bluebay Absolute has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic 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 Franklin Mutual and Rbc Bluebay

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

The idea behind Franklin Mutual Global and Rbc Bluebay Absolute 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.