Correlation Between Franklin Mutual and Clearbridge Dividend
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Clearbridge Dividend 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 Clearbridge Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual Shares and Clearbridge Dividend Strategy, you can compare the effects of market volatilities on Franklin Mutual and Clearbridge Dividend 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 Clearbridge Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Clearbridge Dividend.
Diversification Opportunities for Franklin Mutual and Clearbridge Dividend
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Clearbridge is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Shares and Clearbridge Dividend Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Dividend 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 Shares are associated (or correlated) with Clearbridge Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Dividend has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Clearbridge Dividend go up and down completely randomly.
Pair Corralation between Franklin Mutual and Clearbridge Dividend
Assuming the 90 days horizon Franklin Mutual is expected to generate 1.43 times less return on investment than Clearbridge Dividend. In addition to that, Franklin Mutual is 1.12 times more volatile than Clearbridge Dividend Strategy. It trades about 0.03 of its total potential returns per unit of risk. Clearbridge Dividend Strategy is currently generating about 0.05 per unit of volatility. If you would invest 2,676 in Clearbridge Dividend Strategy on September 26, 2024 and sell it today you would earn a total of 457.00 from holding Clearbridge Dividend Strategy or generate 17.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 99.8% |
Values | Daily Returns |
Franklin Mutual Shares vs. Clearbridge Dividend Strategy
Performance |
Timeline |
Franklin Mutual Shares |
Clearbridge Dividend |
Franklin Mutual and Clearbridge Dividend Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Mutual and Clearbridge Dividend
The main advantage of trading using opposite Franklin Mutual and Clearbridge Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Clearbridge Dividend 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 Clearbridge Dividend will offset losses from the drop in Clearbridge Dividend's long position.Franklin Mutual vs. Templeton Growth Fund | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Income Fund | Franklin Mutual vs. Franklin Rising Dividends |
Clearbridge Dividend vs. Franklin Growth Fund | Clearbridge Dividend vs. Franklin Total Return | Clearbridge Dividend vs. Franklin Rising Dividends | Clearbridge Dividend vs. Franklin Mutual Shares |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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