Correlation Between Franklin Mutual and Simt Global

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

Diversification Opportunities for Franklin Mutual and Simt Global

0.78

Correlation Coefficient

Franklin Mutual  Simt Global

Poor diversification

The 3 months correlation between Franklin and Simt is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Simt Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Global Managed 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 Simt Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Global Managed has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Simt Global go up and down completely randomly.

Pair Corralation between Franklin Mutual and Simt Global

Assuming the 90 days horizon Franklin Mutual is expected to generate 1.82 times less return on investment than Simt Global. In addition to that, Franklin Mutual is 1.46 times more volatile than Simt Global Managed. It trades about 0.01 of its total potential returns per unit of risk. Simt Global Managed is currently generating about 0.03 per unit of volatility. If you would invest  941.00  in Simt Global Managed on October 9, 2024 and sell it today you would earn a total of  72.00  from holding Simt Global Managed or generate 7.65% return on investment over 90 days.

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

Franklin Mutual Global  vs.  Simt Global Managed

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 weak performance in the last few months, the Fund's basic 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.

Simt Global Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simt Global Managed 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 Simt Global

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

The idea behind Franklin Mutual Global and Simt Global Managed 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.