Correlation Between Aam Select and Franklin Dynatech
Can any of the company-specific risk be diversified away by investing in both Aam Select and Franklin Dynatech 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 Aam Select and Franklin Dynatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aam Select Income and Franklin Dynatech Fund, you can compare the effects of market volatilities on Aam Select and Franklin Dynatech 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 Aam Select with a short position of Franklin Dynatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam Select and Franklin Dynatech.
Diversification Opportunities for Aam Select and Franklin Dynatech
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aam and Franklin is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aam Select Income and Franklin Dynatech Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Dynatech and Aam Select 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 Aam Select Income are associated (or correlated) with Franklin Dynatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Dynatech has no effect on the direction of Aam Select i.e., Aam Select and Franklin Dynatech go up and down completely randomly.
Pair Corralation between Aam Select and Franklin Dynatech
Assuming the 90 days horizon Aam Select is expected to generate 3.4 times less return on investment than Franklin Dynatech. But when comparing it to its historical volatility, Aam Select Income is 4.23 times less risky than Franklin Dynatech. It trades about 0.08 of its potential returns per unit of risk. Franklin Dynatech Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 15,168 in Franklin Dynatech Fund on September 3, 2024 and sell it today you would earn a total of 1,672 from holding Franklin Dynatech Fund or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aam Select Income vs. Franklin Dynatech Fund
Performance |
| Timeline |
| Aam Select Income |
| Franklin Dynatech |
Aam Select and Franklin Dynatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam Select and Franklin Dynatech
The main advantage of trading using opposite Aam Select and Franklin Dynatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam Select position performs unexpectedly, Franklin Dynatech 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 Franklin Dynatech will offset losses from the drop in Franklin Dynatech's long position.| Aam Select vs. Needham Aggressive Growth | Aam Select vs. Western Asset High | Aam Select vs. Gmo High Yield | Aam Select vs. Nuveen High Income |
| Franklin Dynatech vs. Aam Select Income | Franklin Dynatech vs. Volumetric Fund Volumetric | Franklin Dynatech vs. Bbh Intermediate Municipal | Franklin Dynatech vs. Scharf Global Opportunity |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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