Correlation Between Dunham Real and Franklin Real
Can any of the company-specific risk be diversified away by investing in both Dunham Real and Franklin Real 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 Real and Franklin Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Real Estate and Franklin Real Estate, you can compare the effects of market volatilities on Dunham Real and Franklin Real 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 Real with a short position of Franklin Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Franklin Real.
Diversification Opportunities for Dunham Real and Franklin Real
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dunham and Franklin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Franklin Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Real Estate and Dunham Real 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 Real Estate are associated (or correlated) with Franklin Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Real Estate has no effect on the direction of Dunham Real i.e., Dunham Real and Franklin Real go up and down completely randomly.
Pair Corralation between Dunham Real and Franklin Real
Assuming the 90 days horizon Dunham Real Estate is expected to generate 1.08 times more return on investment than Franklin Real. However, Dunham Real is 1.08 times more volatile than Franklin Real Estate. It trades about 0.04 of its potential returns per unit of risk. Franklin Real Estate is currently generating about 0.03 per unit of risk. If you would invest 1,246 in Dunham Real Estate on August 29, 2024 and sell it today you would earn a total of 282.00 from holding Dunham Real Estate or generate 22.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Real Estate vs. Franklin Real Estate
Performance |
| Timeline |
| Dunham Real Estate |
| Franklin Real Estate |
Dunham Real and Franklin Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Real and Franklin Real
The main advantage of trading using opposite Dunham Real and Franklin Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real position performs unexpectedly, Franklin Real 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 Real will offset losses from the drop in Franklin Real's long position.| Dunham Real vs. Franklin Natural Resources | Dunham Real vs. HUMANA INC | Dunham Real vs. Aquagold International | Dunham Real vs. Barloworld Ltd ADR |
| Franklin Real vs. Franklin Natural Resources | Franklin Real vs. HUMANA INC | Franklin Real vs. Aquagold International | Franklin Real vs. Barloworld Ltd ADR |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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