Correlation Between Franklin Dynatech and Sp Smallcap
Can any of the company-specific risk be diversified away by investing in both Franklin Dynatech and Sp Smallcap 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 Sp Smallcap 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 Sp Smallcap 600, you can compare the effects of market volatilities on Franklin Dynatech and Sp Smallcap 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 Sp Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Dynatech and Sp Smallcap.
Diversification Opportunities for Franklin Dynatech and Sp Smallcap
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and RYSVX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Dynatech Fund and Sp Smallcap 600 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp Smallcap 600 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 Sp Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp Smallcap 600 has no effect on the direction of Franklin Dynatech i.e., Franklin Dynatech and Sp Smallcap go up and down completely randomly.
Pair Corralation between Franklin Dynatech and Sp Smallcap
Assuming the 90 days horizon Franklin Dynatech Fund is expected to generate 0.88 times more return on investment than Sp Smallcap. However, Franklin Dynatech Fund is 1.14 times less risky than Sp Smallcap. It trades about 0.1 of its potential returns per unit of risk. Sp Smallcap 600 is currently generating about 0.06 per unit of risk. If you would invest 9,540 in Franklin Dynatech Fund on September 12, 2024 and sell it today you would earn a total of 4,626 from holding Franklin Dynatech Fund or generate 48.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.7% |
| Values | Daily Returns |
Franklin Dynatech Fund vs. Sp Smallcap 600
Performance |
| Timeline |
| Franklin Dynatech |
| Sp Smallcap 600 |
Franklin Dynatech and Sp Smallcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Dynatech and Sp Smallcap
The main advantage of trading using opposite Franklin Dynatech and Sp Smallcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Dynatech position performs unexpectedly, Sp Smallcap 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 Sp Smallcap will offset losses from the drop in Sp Smallcap's long position.| Franklin Dynatech vs. Sp Smallcap 600 | Franklin Dynatech vs. Guidemark Smallmid Cap | Franklin Dynatech vs. Small Pany Growth | Franklin Dynatech vs. Cardinal Small Cap |
| Sp Smallcap vs. Vanguard Small Cap Value | Sp Smallcap vs. SCOR PK | Sp Smallcap vs. Morningstar Unconstrained Allocation | Sp Smallcap vs. Thrivent High Yield |
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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