Correlation Between Franklin Mutual and Praxis Impact
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Praxis Impact 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 Praxis Impact 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 Praxis Impact Bond, you can compare the effects of market volatilities on Franklin Mutual and Praxis Impact 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 Praxis Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Praxis Impact.
Diversification Opportunities for Franklin Mutual and Praxis Impact
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Praxis is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Praxis Impact Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis Impact Bond 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 Praxis Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis Impact Bond has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Praxis Impact go up and down completely randomly.
Pair Corralation between Franklin Mutual and Praxis Impact
Assuming the 90 days horizon Franklin Mutual Global is expected to generate 1.95 times more return on investment than Praxis Impact. However, Franklin Mutual is 1.95 times more volatile than Praxis Impact Bond. It trades about -0.03 of its potential returns per unit of risk. Praxis Impact Bond is currently generating about -0.17 per unit of risk. If you would invest 3,181 in Franklin Mutual Global on September 15, 2024 and sell it today you would lose (35.00) from holding Franklin Mutual Global or give up 1.1% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Mutual Global vs. Praxis Impact Bond
Performance |
Timeline |
Franklin Mutual Global |
Praxis Impact Bond |
Franklin Mutual and Praxis Impact Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Mutual and Praxis Impact
The main advantage of trading using opposite Franklin Mutual and Praxis Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Praxis Impact 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 Praxis Impact will offset losses from the drop in Praxis Impact's long position.Franklin Mutual vs. Franklin Mutual Beacon | Franklin Mutual vs. Templeton Developing Markets | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Global |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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