Correlation Between Franklin Mutual and Vanguard Total

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

Diversification Opportunities for Franklin Mutual and Vanguard Total

0.0

Correlation Coefficient

Franklin Mutual  Vanguard Total

Pay attention - limited upside

The 3 months correlation between Franklin and Vanguard is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Vanguard Total World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total World 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 Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total World has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Vanguard Total go up and down completely randomly.

Pair Corralation between Franklin Mutual and Vanguard Total

If you would invest (100.00) in Vanguard Total World on January 30, 2024 and sell it today you would earn a total of  100.00  from holding Vanguard Total World or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Franklin Mutual Global  vs.  Vanguard Total World

Franklin Mutual Global

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Mutual Global are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Franklin Mutual is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vanguard Total World

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Total World has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Vanguard Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Franklin Mutual and Vanguard Total

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

The idea behind Franklin Mutual Global and Vanguard Total World 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.