Correlation Between Franklin Dynatech and Mfs International
Can any of the company-specific risk be diversified away by investing in both Franklin Dynatech and Mfs International 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 Dynatech and Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Dynatech Fund and Mfs International Diversification, you can compare the effects of market volatilities on Franklin Dynatech and Mfs International 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 Dynatech with a short position of Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Dynatech and Mfs International.
Diversification Opportunities for Franklin Dynatech and Mfs International
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Mfs is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Dynatech Fund and Mfs International Diversificat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International and Franklin Dynatech 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 Dynatech Fund are associated (or correlated) with Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International has no effect on the direction of Franklin Dynatech i.e., Franklin Dynatech and Mfs International go up and down completely randomly.
Pair Corralation between Franklin Dynatech and Mfs International
Assuming the 90 days horizon Franklin Dynatech Fund is expected to generate 1.51 times more return on investment than Mfs International. However, Franklin Dynatech is 1.51 times more volatile than Mfs International Diversification. It trades about 0.27 of its potential returns per unit of risk. Mfs International Diversification is currently generating about -0.1 per unit of risk. If you would invest 17,704 in Franklin Dynatech Fund on September 3, 2024 and sell it today you would earn a total of 1,043 from holding Franklin Dynatech Fund or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Dynatech Fund vs. Mfs International Diversificat
Performance |
| Timeline |
| Franklin Dynatech |
| Mfs International |
Franklin Dynatech and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Dynatech and Mfs International
The main advantage of trading using opposite Franklin Dynatech and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Dynatech position performs unexpectedly, Mfs International 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 Mfs International will offset losses from the drop in Mfs International's long position.| Franklin Dynatech vs. Mfs International Diversification | Franklin Dynatech vs. John Hancock Bond | Franklin Dynatech vs. Lord Abbett Bond | Franklin Dynatech vs. Prudential Total Return |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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