Correlation Between Franklin Mutual and Counterpoint Tactical
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Counterpoint Tactical 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 Counterpoint Tactical 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 Counterpoint Tactical Municipal, you can compare the effects of market volatilities on Franklin Mutual and Counterpoint Tactical 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 Counterpoint Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Counterpoint Tactical.
Diversification Opportunities for Franklin Mutual and Counterpoint Tactical
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Counterpoint is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Counterpoint Tactical Municipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Counterpoint Tactical 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 Counterpoint Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Counterpoint Tactical has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Counterpoint Tactical go up and down completely randomly.
Pair Corralation between Franklin Mutual and Counterpoint Tactical
Assuming the 90 days horizon Franklin Mutual Global is expected to under-perform the Counterpoint Tactical. In addition to that, Franklin Mutual is 6.53 times more volatile than Counterpoint Tactical Municipal. It trades about -0.34 of its total potential returns per unit of risk. Counterpoint Tactical Municipal is currently generating about -0.41 per unit of volatility. If you would invest 1,099 in Counterpoint Tactical Municipal on September 25, 2024 and sell it today you would lose (28.00) from holding Counterpoint Tactical Municipal or give up 2.55% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Mutual Global vs. Counterpoint Tactical Municipa
Performance |
Timeline |
Franklin Mutual Global |
Counterpoint Tactical |
Franklin Mutual and Counterpoint Tactical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Mutual and Counterpoint Tactical
The main advantage of trading using opposite Franklin Mutual and Counterpoint Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Counterpoint Tactical 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 Counterpoint Tactical will offset losses from the drop in Counterpoint Tactical's long position.Franklin Mutual vs. Fidelity Managed Retirement | Franklin Mutual vs. Sa Worldwide Moderate | Franklin Mutual vs. Jp Morgan Smartretirement | Franklin Mutual vs. Blackrock Moderate Prepared |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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