Correlation Between Franklin Dynatech and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Franklin Dynatech and Prudential Jennison 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 Prudential Jennison 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 Prudential Jennison International, you can compare the effects of market volatilities on Franklin Dynatech and Prudential Jennison 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 Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Dynatech and Prudential Jennison.
Diversification Opportunities for Franklin Dynatech and Prudential Jennison
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Prudential is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Dynatech Fund and Prudential Jennison Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison 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 Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Franklin Dynatech i.e., Franklin Dynatech and Prudential Jennison go up and down completely randomly.
Pair Corralation between Franklin Dynatech and Prudential Jennison
Assuming the 90 days horizon Franklin Dynatech Fund is expected to generate 1.24 times more return on investment than Prudential Jennison. However, Franklin Dynatech is 1.24 times more volatile than Prudential Jennison International. It trades about 0.09 of its potential returns per unit of risk. Prudential Jennison International is currently generating about 0.03 per unit of risk. If you would invest 12,628 in Franklin Dynatech Fund on September 2, 2024 and sell it today you would earn a total of 6,119 from holding Franklin Dynatech Fund or generate 48.46% 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. Prudential Jennison Internatio
Performance |
| Timeline |
| Franklin Dynatech |
| Prudential Jennison |
Franklin Dynatech and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Dynatech and Prudential Jennison
The main advantage of trading using opposite Franklin Dynatech and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Dynatech position performs unexpectedly, Prudential Jennison 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 Prudential Jennison will offset losses from the drop in Prudential Jennison'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 |
| Prudential Jennison vs. Aam Select Income | Prudential Jennison vs. Qs Large Cap | Prudential Jennison vs. Western Asset Municipal | Prudential Jennison vs. Bbh Partner Fund |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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