Correlation Between Dreyfus Technology and Franklin Emerging
Can any of the company-specific risk be diversified away by investing in both Dreyfus Technology and Franklin Emerging 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 Dreyfus Technology and Franklin Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Technology Growth and Franklin Emerging Market, you can compare the effects of market volatilities on Dreyfus Technology and Franklin Emerging 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 Dreyfus Technology with a short position of Franklin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Technology and Franklin Emerging.
Diversification Opportunities for Dreyfus Technology and Franklin Emerging
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dreyfus and Franklin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Technology Growth and Franklin Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Emerging Market and Dreyfus Technology 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 Dreyfus Technology Growth are associated (or correlated) with Franklin Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Emerging Market has no effect on the direction of Dreyfus Technology i.e., Dreyfus Technology and Franklin Emerging go up and down completely randomly.
Pair Corralation between Dreyfus Technology and Franklin Emerging
Assuming the 90 days horizon Dreyfus Technology Growth is expected to generate 5.3 times more return on investment than Franklin Emerging. However, Dreyfus Technology is 5.3 times more volatile than Franklin Emerging Market. It trades about 0.15 of its potential returns per unit of risk. Franklin Emerging Market is currently generating about 0.25 per unit of risk. If you would invest 7,201 in Dreyfus Technology Growth on September 12, 2024 and sell it today you would earn a total of 742.00 from holding Dreyfus Technology Growth or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Technology Growth vs. Franklin Emerging Market
Performance |
| Timeline |
| Dreyfus Technology Growth |
| Franklin Emerging Market |
Dreyfus Technology and Franklin Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Technology and Franklin Emerging
The main advantage of trading using opposite Dreyfus Technology and Franklin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Technology position performs unexpectedly, Franklin Emerging 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 Emerging will offset losses from the drop in Franklin Emerging's long position.| Dreyfus Technology vs. Veea Inc | Dreyfus Technology vs. VivoPower International PLC | Dreyfus Technology vs. Dreyfus High Yield | Dreyfus Technology vs. Dreyfusthe Boston Pany |
| Franklin Emerging vs. Health Biotchnology Portfolio | Franklin Emerging vs. Deutsche Health And | Franklin Emerging vs. Baron Health Care | Franklin Emerging vs. Prudential Health Sciences |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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