Correlation Between Franklin Mutual and Pioneer Select

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

Diversification Opportunities for Franklin Mutual and Pioneer Select

0.18

Correlation Coefficient

Franklin Mutual  Pioneer Select

Average diversification

The 3 months correlation between Franklin and Pioneer is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Pioneer Select Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Select Mid 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 Pioneer Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Select Mid has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Pioneer Select go up and down completely randomly.

Pair Corralation between Franklin Mutual and Pioneer Select

Assuming the 90 days horizon Franklin Mutual Global is expected to under-perform the Pioneer Select. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Mutual Global is 2.67 times less risky than Pioneer Select. The mutual fund trades about -0.12 of its potential returns per unit of risk. The Pioneer Select Mid is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  5,189  in Pioneer Select Mid on September 21, 2024 and sell it today you would lose (214.00) from holding Pioneer Select Mid or give up 4.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Franklin Mutual Global  vs.  Pioneer Select Mid

Franklin Mutual Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pioneer Select Mid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pioneer Select Mid has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Pioneer Select 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 Pioneer Select

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

The idea behind Franklin Mutual Global and Pioneer Select Mid 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.