Correlation Between Franklin Mutual and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Templeton 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 Templeton 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 Templeton Smacs, you can compare the effects of market volatilities on Franklin Mutual and Franklin Templeton 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 Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Templeton.
Diversification Opportunities for Franklin Mutual and Franklin Templeton
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Franklin is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Franklin Templeton Smacs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton Smacs 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 Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton Smacs has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Templeton go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Templeton
Assuming the 90 days horizon Franklin Mutual Global is expected to under-perform the Franklin Templeton. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Mutual Global is 1.65 times less risky than Franklin Templeton. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Franklin Templeton Smacs is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 861.00 in Franklin Templeton Smacs on April 7, 2024 and sell it today you would earn a total of 72.00 from holding Franklin Templeton Smacs or generate 8.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Mutual Global vs. Franklin Templeton Smacs
Performance |
Timeline |
Franklin Mutual Global |
Franklin Templeton Smacs |
Franklin Mutual and Franklin Templeton Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Mutual and Franklin Templeton
The main advantage of trading using opposite Franklin Mutual and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Templeton 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 Templeton will offset losses from the drop in Franklin Templeton's long position.Franklin Mutual vs. Scharf Global Opportunity | Franklin Mutual vs. Rbc Microcap Value | Franklin Mutual vs. Iaadx | Franklin Mutual vs. Rbb Fund |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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