Correlation Between Dupont De and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Dupont De and Franklin Lifesmart 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 Lifesmart 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 Lifesmart 2055, you can compare the effects of market volatilities on Dupont De and Franklin Lifesmart 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 Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Franklin Lifesmart.
Diversification Opportunities for Dupont De and Franklin Lifesmart
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dupont and Franklin is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Franklin Lifesmart 2055 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2055 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 Lifesmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Lifesmart 2055 has no effect on the direction of Dupont De i.e., Dupont De and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Dupont De and Franklin Lifesmart
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Franklin Lifesmart. In addition to that, Dupont De is 1.88 times more volatile than Franklin Lifesmart 2055. It trades about -0.06 of its total potential returns per unit of risk. Franklin Lifesmart 2055 is currently generating about -0.02 per unit of volatility. If you would invest 1,376 in Franklin Lifesmart 2055 on January 11, 2025 and sell it today you would lose (85.00) from holding Franklin Lifesmart 2055 or give up 6.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Franklin Lifesmart 2055
Performance |
| Timeline |
| Dupont De Nemours |
| Franklin Lifesmart 2055 |
Dupont De and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Franklin Lifesmart
The main advantage of trading using opposite Dupont De and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Franklin Lifesmart 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 Lifesmart will offset losses from the drop in Franklin Lifesmart's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Franklin Lifesmart vs. Franklin Mutual Beacon | Franklin Lifesmart vs. Templeton Developing Markets | Franklin Lifesmart vs. Franklin Mutual Global | Franklin Lifesmart vs. Franklin Mutual Global |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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