Correlation Between Franklin India and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Franklin India 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 India 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 India Growth and Dow Jones Industrial, you can compare the effects of market volatilities on Franklin India 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 India with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin India and Dow Jones.
Diversification Opportunities for Franklin India and Dow Jones
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Dow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin India Growth 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 India 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 India Growth 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 India i.e., Franklin India and Dow Jones go up and down completely randomly.
Pair Corralation between Franklin India and Dow Jones
If you would invest 3,265,670 in Dow Jones Industrial on November 19, 2024 and sell it today you would earn a total of 1,188,938 from holding Dow Jones Industrial or generate 36.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Franklin India Growth vs. Dow Jones Industrial
Performance |
| Timeline |
Franklin India and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Franklin India Growth
Pair trading matchups for Franklin India
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Franklin India and Dow Jones
The main advantage of trading using opposite Franklin India and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin India 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 India vs. Lord Abbett Diversified | Franklin India vs. Stone Ridge Diversified | Franklin India vs. Aqr Diversified Arbitrage | Franklin India vs. Global Diversified Income |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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