Correlation Between Franklin Founding and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Franklin Founding and Dow Jones 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 Founding and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Founding Funds and Dow Jones Industrial, you can compare the effects of market volatilities on Franklin Founding and Dow Jones 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 Founding with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Founding and Dow Jones.
Diversification Opportunities for Franklin Founding and Dow Jones
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Dow is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Founding Funds and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Franklin Founding 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 Founding Funds are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Franklin Founding i.e., Franklin Founding and Dow Jones go up and down completely randomly.
Pair Corralation between Franklin Founding and Dow Jones
Assuming the 90 days horizon Franklin Founding Funds is expected to generate 0.61 times more return on investment than Dow Jones. However, Franklin Founding Funds is 1.63 times less risky than Dow Jones. It trades about 0.13 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.02 per unit of risk. If you would invest 1,573 in Franklin Founding Funds on September 12, 2024 and sell it today you would earn a total of 15.00 from holding Franklin Founding Funds or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Founding Funds vs. Dow Jones Industrial
Performance |
| Timeline |
Franklin Founding and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Franklin Founding Funds
Pair trading matchups for Franklin Founding
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Franklin Founding and Dow Jones
The main advantage of trading using opposite Franklin Founding and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Founding position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Franklin Founding vs. Capital Income Builder | Franklin Founding vs. Capital Income Builder | Franklin Founding vs. Capital Income Builder | Franklin Founding vs. Capital Income Builder |
| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |