Correlation Between Franklin Mutual and Navian Waycross

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

Diversification Opportunities for Franklin Mutual and Navian Waycross

0.56

Correlation Coefficient

Franklin Mutual  Navian Waycross

Very weak diversification

The 3 months correlation between Franklin and Navian is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Navian Waycross Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navian Waycross Longshort 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 Navian Waycross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navian Waycross Longshort has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Navian Waycross go up and down completely randomly.

Pair Corralation between Franklin Mutual and Navian Waycross

Assuming the 90 days horizon Franklin Mutual Global is expected to under-perform the Navian Waycross. In addition to that, Franklin Mutual is 1.79 times more volatile than Navian Waycross Longshort. It trades about -0.27 of its total potential returns per unit of risk. Navian Waycross Longshort is currently generating about -0.27 per unit of volatility. If you would invest  1,780  in Navian Waycross Longshort on October 17, 2024 and sell it today you would lose (116.00) from holding Navian Waycross Longshort or give up 6.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Franklin Mutual Global  vs.  Navian Waycross Longshort

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 unfluctuating performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Navian Waycross Longshort

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Navian Waycross Longshort has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Navian Waycross is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Franklin Mutual and Navian Waycross

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

The idea behind Franklin Mutual Global and Navian Waycross Longshort 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.