Correlation Between Dupont De and Franklin Small
Can any of the company-specific risk be diversified away by investing in both Dupont De and Franklin Small 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 Dupont De and Franklin Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont De Nemours and Franklin Small Cap, you can compare the effects of market volatilities on Dupont De and Franklin Small 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 Dupont De with a short position of Franklin Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Franklin Small.
Diversification Opportunities for Dupont De and Franklin Small
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and Franklin is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Franklin Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Small Cap and Dupont De 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 Dupont De Nemours are associated (or correlated) with Franklin Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Small Cap has no effect on the direction of Dupont De i.e., Dupont De and Franklin Small go up and down completely randomly.
Pair Corralation between Dupont De and Franklin Small
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Franklin Small. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.41 times less risky than Franklin Small. The stock trades about -0.55 of its potential returns per unit of risk. The Franklin Small Cap is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 1,665 in Franklin Small Cap on October 11, 2024 and sell it today you would lose (58.00) from holding Franklin Small Cap or give up 3.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Franklin Small Cap
Performance |
| Timeline |
| Dupont De Nemours |
| Franklin Small Cap |
Dupont De and Franklin Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Franklin Small
The main advantage of trading using opposite Dupont De and Franklin Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Franklin Small 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 Small will offset losses from the drop in Franklin Small's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Franklin Small vs. T Rowe Price | Franklin Small vs. Ab Equity Income | Franklin Small vs. T Rowe Price | Franklin Small vs. Enhanced Fixed Income |
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
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |