Correlation Between Franklin Mutual and Emerald Banking

Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Emerald Banking 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 Emerald Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Franklin Mutual Financial and Emerald Banking And, you can compare the effects of market volatilities on Franklin Mutual and Emerald Banking 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 Emerald Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Emerald Banking.

Diversification Opportunities for Franklin Mutual and Emerald Banking

0.68

Correlation Coefficient

Franklin Mutual  Emerald Banking

Poor diversification

The 3 months correlation between Franklin and Emerald is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Financial and Emerald Banking And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Banking And 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 Financial are associated (or correlated) with Emerald Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Banking And has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Emerald Banking go up and down completely randomly.

Pair Corralation between Franklin Mutual and Emerald Banking

If you would invest  2,435  in Emerald Banking And on September 5, 2024 and sell it today you would earn a total of  402.00  from holding Emerald Banking And or generate 16.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Franklin Mutual Financial  vs.  Emerald Banking And

Franklin Mutual Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Mutual Financial 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.

Emerald Banking And

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Emerald Banking And are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Emerald Banking showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Franklin Mutual and Emerald Banking

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

The idea behind Franklin Mutual Financial and Emerald Banking And 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.