Correlation Between Franklin High and Dunham Porategovernment
Can any of the company-specific risk be diversified away by investing in both Franklin High and Dunham Porategovernment 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 Dunham Porategovernment 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 Dunham Porategovernment Bond, you can compare the effects of market volatilities on Franklin High and Dunham Porategovernment 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 Dunham Porategovernment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Dunham Porategovernment.
Diversification Opportunities for Franklin High and Dunham Porategovernment
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Dunham is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Dunham Porategovernment Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Porategovernment 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 Dunham Porategovernment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Porategovernment has no effect on the direction of Franklin High i.e., Franklin High and Dunham Porategovernment go up and down completely randomly.
Pair Corralation between Franklin High and Dunham Porategovernment
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.88 times more return on investment than Dunham Porategovernment. However, Franklin High Yield is 1.14 times less risky than Dunham Porategovernment. It trades about 0.14 of its potential returns per unit of risk. Dunham Porategovernment Bond is currently generating about 0.06 per unit of risk. If you would invest 841.00 in Franklin High Yield on September 12, 2024 and sell it today you would earn a total of 76.00 from holding Franklin High Yield or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Dunham Porategovernment Bond
Performance |
| Timeline |
| Franklin High Yield |
| Dunham Porategovernment |
Franklin High and Dunham Porategovernment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Dunham Porategovernment
The main advantage of trading using opposite Franklin High and Dunham Porategovernment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Dunham Porategovernment 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 Dunham Porategovernment will offset losses from the drop in Dunham Porategovernment's long position.| Franklin High vs. Cref Money Market | Franklin High vs. Chestnut Street Exchange | Franklin High vs. Aig Government Money | Franklin High vs. Matson Money Equity |
| Dunham Porategovernment vs. Metropolitan West Total | Dunham Porategovernment vs. SCOR PK | Dunham Porategovernment vs. Morningstar Unconstrained Allocation | Dunham Porategovernment 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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