Correlation Between Dunham High and Franklin Rising
Can any of the company-specific risk be diversified away by investing in both Dunham High and Franklin Rising 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 Dunham High and Franklin Rising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham High Yield and Franklin Rising Dividends, you can compare the effects of market volatilities on Dunham High and Franklin Rising 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 Dunham High with a short position of Franklin Rising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Franklin Rising.
Diversification Opportunities for Dunham High and Franklin Rising
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dunham and Franklin is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield and Franklin Rising Dividends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Rising Dividends and Dunham High 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 Dunham High Yield are associated (or correlated) with Franklin Rising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Rising Dividends has no effect on the direction of Dunham High i.e., Dunham High and Franklin Rising go up and down completely randomly.
Pair Corralation between Dunham High and Franklin Rising
Assuming the 90 days horizon Dunham High is expected to generate 4.68 times less return on investment than Franklin Rising. But when comparing it to its historical volatility, Dunham High Yield is 4.86 times less risky than Franklin Rising. It trades about 0.08 of its potential returns per unit of risk. Franklin Rising Dividends is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9,740 in Franklin Rising Dividends on August 28, 2024 and sell it today you would earn a total of 207.00 from holding Franklin Rising Dividends or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Dunham High Yield vs. Franklin Rising Dividends
Performance |
| Timeline |
| Dunham High Yield |
| Franklin Rising Dividends |
Dunham High and Franklin Rising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham High and Franklin Rising
The main advantage of trading using opposite Dunham High and Franklin Rising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham High position performs unexpectedly, Franklin Rising 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 Rising will offset losses from the drop in Franklin Rising's long position.| Dunham High vs. Barings Active Short | Dunham High vs. Rbc Short Duration | Dunham High vs. Jhancock Short Duration | Dunham High vs. Ultra Short Fixed Income |
| Franklin Rising vs. Baird Strategic Municipal | Franklin Rising vs. Morningstar Municipal Bond | Franklin Rising vs. T Rowe Price | Franklin Rising vs. The National Tax Free |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |