Correlation Between Dunham Emerging and Franklin Small
Can any of the company-specific risk be diversified away by investing in both Dunham Emerging 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 Dunham Emerging and Franklin Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Emerging Markets and Franklin Small Cap, you can compare the effects of market volatilities on Dunham Emerging 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 Dunham Emerging with a short position of Franklin Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Emerging and Franklin Small.
Diversification Opportunities for Dunham Emerging and Franklin Small
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dunham and Franklin is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Emerging Markets 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 Dunham Emerging 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 Emerging Markets 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 Dunham Emerging i.e., Dunham Emerging and Franklin Small go up and down completely randomly.
Pair Corralation between Dunham Emerging and Franklin Small
Assuming the 90 days horizon Dunham Emerging is expected to generate 14.79 times less return on investment than Franklin Small. But when comparing it to its historical volatility, Dunham Emerging Markets is 1.01 times less risky than Franklin Small. It trades about 0.02 of its potential returns per unit of risk. Franklin Small Cap is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,584 in Franklin Small Cap on November 3, 2024 and sell it today you would earn a total of 96.00 from holding Franklin Small Cap or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dunham Emerging Markets vs. Franklin Small Cap
Performance |
| Timeline |
| Dunham Emerging Markets |
| Franklin Small Cap |
Dunham Emerging and Franklin Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Emerging and Franklin Small
The main advantage of trading using opposite Dunham Emerging and Franklin Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Emerging 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.| Dunham Emerging vs. The Hartford Healthcare | Dunham Emerging vs. Allianzgi Health Sciences | Dunham Emerging vs. Eventide Healthcare Life | Dunham Emerging vs. Highland Longshort Healthcare |
| Franklin Small vs. Fidelity Advisor Technology | Franklin Small vs. Vanguard Information Technology | Franklin Small vs. Red Oak Technology | Franklin Small vs. Columbia Global Technology |
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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