Correlation Between Franklin High and Dreyfus International
Can any of the company-specific risk be diversified away by investing in both Franklin High and Dreyfus 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 High and Dreyfus International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin High Yield and Dreyfus International Equity, you can compare the effects of market volatilities on Franklin High and Dreyfus 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 High with a short position of Dreyfus International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Dreyfus International.
Diversification Opportunities for Franklin High and Dreyfus International
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Dreyfus is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Dreyfus International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus International and Franklin High 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 High Yield are associated (or correlated) with Dreyfus International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus International has no effect on the direction of Franklin High i.e., Franklin High and Dreyfus International go up and down completely randomly.
Pair Corralation between Franklin High and Dreyfus International
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.45 times more return on investment than Dreyfus International. However, Franklin High Yield is 2.24 times less risky than Dreyfus International. It trades about 0.06 of its potential returns per unit of risk. Dreyfus International Equity is currently generating about -0.11 per unit of risk. If you would invest 923.00 in Franklin High Yield on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Franklin High Yield or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Dreyfus International Equity
Performance |
| Timeline |
| Franklin High Yield |
| Dreyfus International |
Franklin High and Dreyfus International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Dreyfus International
The main advantage of trading using opposite Franklin High and Dreyfus International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Dreyfus 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 Dreyfus International will offset losses from the drop in Dreyfus International's long position.| Franklin High vs. Franklin Mutual Beacon | Franklin High vs. Templeton Developing Markets | Franklin High vs. Franklin Mutual Global | Franklin High vs. Franklin Mutual Global |
| Dreyfus International vs. Dreyfusstandish Global Fixed | Dreyfus International vs. Dreyfusstandish Global Fixed | Dreyfus International vs. Dreyfus High Yield | Dreyfus International vs. Dreyfus 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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