Correlation Between Dynamic Active and Franklin Bissett
Can any of the company-specific risk be diversified away by investing in both Dynamic Active and Franklin Bissett 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 Dynamic Active and Franklin Bissett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynamic Active Dividend and Franklin Bissett Corporate, you can compare the effects of market volatilities on Dynamic Active and Franklin Bissett 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 Dynamic Active with a short position of Franklin Bissett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynamic Active and Franklin Bissett.
Diversification Opportunities for Dynamic Active and Franklin Bissett
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dynamic and Franklin is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Active Dividend and Franklin Bissett Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Bissett Cor and Dynamic Active 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 Dynamic Active Dividend are associated (or correlated) with Franklin Bissett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Bissett Cor has no effect on the direction of Dynamic Active i.e., Dynamic Active and Franklin Bissett go up and down completely randomly.
Pair Corralation between Dynamic Active and Franklin Bissett
Assuming the 90 days trading horizon Dynamic Active Dividend is expected to generate 3.9 times more return on investment than Franklin Bissett. However, Dynamic Active is 3.9 times more volatile than Franklin Bissett Corporate. It trades about 0.29 of its potential returns per unit of risk. Franklin Bissett Corporate is currently generating about 0.24 per unit of risk. If you would invest 6,020 in Dynamic Active Dividend on September 1, 2024 and sell it today you would earn a total of 453.00 from holding Dynamic Active Dividend or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dynamic Active Dividend vs. Franklin Bissett Corporate
Performance |
| Timeline |
| Dynamic Active Dividend |
| Franklin Bissett Cor |
Dynamic Active and Franklin Bissett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynamic Active and Franklin Bissett
The main advantage of trading using opposite Dynamic Active and Franklin Bissett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynamic Active position performs unexpectedly, Franklin Bissett 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 Bissett will offset losses from the drop in Franklin Bissett's long position.| Dynamic Active vs. Dynamic Active Global | Dynamic Active vs. Dynamic Active Canadian | Dynamic Active vs. Dynamic Active Preferred | Dynamic Active vs. Dynamic Active Global |
| Franklin Bissett vs. Franklin Global Aggregate | Franklin Bissett vs. Franklin Large Cap | Franklin Bissett vs. Franklin Global Dividend | Franklin Bissett vs. First Trust Senior |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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