Correlation Between Dodge Cox and Franklin High
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Franklin High 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 Dodge Cox and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Cox Stock and Franklin High Income, you can compare the effects of market volatilities on Dodge Cox and Franklin High 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 Dodge Cox with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Franklin High.
Diversification Opportunities for Dodge Cox and Franklin High
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dodge and Franklin is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Franklin High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Income and Dodge Cox 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 Dodge Cox Stock are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Income has no effect on the direction of Dodge Cox i.e., Dodge Cox and Franklin High go up and down completely randomly.
Pair Corralation between Dodge Cox and Franklin High
Assuming the 90 days horizon Dodge Cox Stock is expected to under-perform the Franklin High. In addition to that, Dodge Cox is 1.79 times more volatile than Franklin High Income. It trades about -0.17 of its total potential returns per unit of risk. Franklin High Income is currently generating about 0.0 per unit of volatility. If you would invest 176.00 in Franklin High Income on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Franklin High Income or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Stock vs. Franklin High Income
Performance |
| Timeline |
| Dodge Cox Stock |
| Franklin High Income |
Dodge Cox and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Franklin High
The main advantage of trading using opposite Dodge Cox and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Franklin High 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 High will offset losses from the drop in Franklin High's long position.| Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. Dodge Income Fund | Dodge Cox vs. Total Return Fund |
| Franklin High vs. Royce Opportunity Fund | Franklin High vs. Fpa Queens Road | Franklin High vs. Palm Valley Capital | Franklin High vs. Valic Company I |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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