Correlation Between Franklin International and Value Line

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

By analyzing existing cross correlation between Franklin International Growth and Value Line Small, you can compare the effects of market volatilities on Franklin International and Value Line 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 International with a short position of Value Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin International and Value Line.

Diversification Opportunities for Franklin International and Value Line

0.14

Correlation Coefficient

Franklin International  Value Line

Average diversification

The 3 months correlation between Franklin and Value is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Franklin International Growth and Value Line Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Line Small and Franklin International 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 International Growth are associated (or correlated) with Value Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Line Small has no effect on the direction of Franklin International i.e., Franklin International and Value Line go up and down completely randomly.

Pair Corralation between Franklin International and Value Line

Assuming the 90 days horizon Franklin International Growth is expected to under-perform the Value Line. In addition to that, Franklin International is 1.08 times more volatile than Value Line Small. It trades about -0.06 of its total potential returns per unit of risk. Value Line Small is currently generating about 0.0 per unit of volatility. If you would invest  6,254  in Value Line Small on August 26, 2025 and sell it today you would lose (22.00) from holding Value Line Small or give up 0.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Franklin International Growth  vs.  Value Line Small

Franklin International

Risk-Adjusted Performance

Weakest

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

Value Line Small

Risk-Adjusted Performance

Weakest

Over the last 90 days Value Line Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Value Line 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 International and Value Line

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

The idea behind Franklin International Growth and Value Line Small 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.