Correlation Between Franklin Mutual and Saat Core

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

Diversification Opportunities for Franklin Mutual and Saat Core

0.93

Correlation Coefficient

Franklin Mutual  Saat Core

Almost no diversification

The 3 months correlation between Franklin and Saat is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Shares and Saat E Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat E Market 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 Saat Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat E Market has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Saat Core go up and down completely randomly.

Pair Corralation between Franklin Mutual and Saat Core

Assuming the 90 days horizon Franklin Mutual Shares is expected to generate 0.66 times more return on investment than Saat Core. However, Franklin Mutual Shares is 1.52 times less risky than Saat Core. It trades about -0.38 of its potential returns per unit of risk. Saat E Market is currently generating about -0.26 per unit of risk. If you would invest  2,792  in Franklin Mutual Shares on October 9, 2024 and sell it today you would lose (334.00) from holding Franklin Mutual Shares or give up 11.96% of portfolio value over 90 days.

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

Franklin Mutual Shares  vs.  Saat E Market

Franklin Mutual Shares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Mutual Shares 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.

Saat E Market

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saat E Market 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 Saat Core

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

The idea behind Franklin Mutual Shares and Saat E Market 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.