Correlation Between Franklin Adjustable and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Dodge Cox 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 Franklin Adjustable and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Adjustable Government and Dodge Cox Income, you can compare the effects of market volatilities on Franklin Adjustable and Dodge Cox 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 Franklin Adjustable with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Dodge Cox.
Diversification Opportunities for Franklin Adjustable and Dodge Cox
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Dodge is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Dodge Cox Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox Income and Franklin Adjustable 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 Franklin Adjustable Government are associated (or correlated) with Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Cox Income has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Dodge Cox go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Dodge Cox
Assuming the 90 days horizon Franklin Adjustable Government is expected to generate 0.34 times more return on investment than Dodge Cox. However, Franklin Adjustable Government is 2.91 times less risky than Dodge Cox. It trades about 0.14 of its potential returns per unit of risk. Dodge Cox Income is currently generating about 0.01 per unit of risk. If you would invest 738.00 in Franklin Adjustable Government on October 26, 2024 and sell it today you would earn a total of 15.00 from holding Franklin Adjustable Government or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Dodge Cox Income
Performance |
| Timeline |
| Franklin Adjustable |
| Dodge Cox Income |
Franklin Adjustable and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Dodge Cox
The main advantage of trading using opposite Franklin Adjustable and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Dodge Cox 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 Dodge Cox will offset losses from the drop in Dodge Cox's long position.| Franklin Adjustable vs. Lord Abbett Short | Franklin Adjustable vs. Voya High Yield | Franklin Adjustable vs. Neuberger Berman Income | Franklin Adjustable vs. Strategic Advisers Income |
| Dodge Cox vs. Ab Municipal Bond | Dodge Cox vs. Bbh Intermediate Municipal | Dodge Cox vs. Lord Abbett Intermediate | Dodge Cox vs. Franklin Adjustable Government |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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