Correlation Between Franklin Mutual and Franklin Small
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Small 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 Franklin Small 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 Franklin Small Cap, you can compare the effects of market volatilities on Franklin Mutual and Franklin Small 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 Franklin Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Small.
Diversification Opportunities for Franklin Mutual and Franklin Small
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Franklin is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Franklin Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Small Cap 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 Franklin Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Small Cap has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Small go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Small
Assuming the 90 days horizon Franklin Mutual Global is expected to under-perform the Franklin Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Mutual Global is 1.5 times less risky than Franklin Small. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Franklin Small Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,243 in Franklin Small Cap on September 26, 2024 and sell it today you would earn a total of 857.00 from holding Franklin Small Cap or generate 16.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.68% |
Values | Daily Returns |
Franklin Mutual Global vs. Franklin Small Cap
Performance |
Timeline |
Franklin Mutual Global |
Franklin Small Cap |
Franklin Mutual and Franklin Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Mutual and Franklin Small
The main advantage of trading using opposite Franklin Mutual and Franklin Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Small 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 Franklin Small will offset losses from the drop in Franklin Small's long position.Franklin Mutual vs. Goldman Sachs Financial | Franklin Mutual vs. Davis Financial Fund | Franklin Mutual vs. Gabelli Global Financial | Franklin Mutual vs. Mesirow Financial Small |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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