Correlation Between Franklin Dynatech and Jpmorgan Equity
Can any of the company-specific risk be diversified away by investing in both Franklin Dynatech and Jpmorgan Equity 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 Jpmorgan Equity 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 Jpmorgan Equity Income, you can compare the effects of market volatilities on Franklin Dynatech and Jpmorgan Equity 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 Jpmorgan Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Dynatech and Jpmorgan Equity.
Diversification Opportunities for Franklin Dynatech and Jpmorgan Equity
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Jpmorgan is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Dynatech Fund and Jpmorgan Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Equity Income 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 Jpmorgan Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Equity Income has no effect on the direction of Franklin Dynatech i.e., Franklin Dynatech and Jpmorgan Equity go up and down completely randomly.
Pair Corralation between Franklin Dynatech and Jpmorgan Equity
Assuming the 90 days horizon Franklin Dynatech is expected to generate 1.72 times less return on investment than Jpmorgan Equity. In addition to that, Franklin Dynatech is 2.3 times more volatile than Jpmorgan Equity Income. It trades about 0.08 of its total potential returns per unit of risk. Jpmorgan Equity Income is currently generating about 0.33 per unit of volatility. If you would invest 2,389 in Jpmorgan Equity Income on November 3, 2024 and sell it today you would earn a total of 121.00 from holding Jpmorgan Equity Income or generate 5.06% 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. Jpmorgan Equity Income
Performance |
| Timeline |
| Franklin Dynatech |
| Jpmorgan Equity Income |
Franklin Dynatech and Jpmorgan Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Dynatech and Jpmorgan Equity
The main advantage of trading using opposite Franklin Dynatech and Jpmorgan Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Dynatech position performs unexpectedly, Jpmorgan Equity 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 Jpmorgan Equity will offset losses from the drop in Jpmorgan Equity'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 |
| Jpmorgan Equity vs. Mfs International Diversification | Jpmorgan Equity vs. Franklin Dynatech Fund | Jpmorgan Equity vs. Prudential Total Return | Jpmorgan Equity vs. John Hancock Bond |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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