Correlation Between Franklin Income and Franklin Dynatech
Can any of the company-specific risk be diversified away by investing in both Franklin Income and Franklin Dynatech 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 Income and Franklin Dynatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Income Fund and Franklin Dynatech Fund, you can compare the effects of market volatilities on Franklin Income and Franklin Dynatech 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 Income with a short position of Franklin Dynatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Income and Franklin Dynatech.
Diversification Opportunities for Franklin Income and Franklin Dynatech
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Franklin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Income Fund and Franklin Dynatech Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Dynatech and Franklin Income 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 Income Fund are associated (or correlated) with Franklin Dynatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Dynatech has no effect on the direction of Franklin Income i.e., Franklin Income and Franklin Dynatech go up and down completely randomly.
Pair Corralation between Franklin Income and Franklin Dynatech
Assuming the 90 days horizon Franklin Income is expected to generate 3.4 times less return on investment than Franklin Dynatech. But when comparing it to its historical volatility, Franklin Income Fund is 3.34 times less risky than Franklin Dynatech. It trades about 0.26 of its potential returns per unit of risk. Franklin Dynatech Fund is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 15,910 in Franklin Dynatech Fund on September 3, 2024 and sell it today you would earn a total of 930.00 from holding Franklin Dynatech Fund or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Income Fund vs. Franklin Dynatech Fund
Performance |
| Timeline |
| Franklin Income |
| Franklin Dynatech |
Franklin Income and Franklin Dynatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Income and Franklin Dynatech
The main advantage of trading using opposite Franklin Income and Franklin Dynatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Income position performs unexpectedly, Franklin Dynatech 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 Franklin Dynatech will offset losses from the drop in Franklin Dynatech's long position.| Franklin Income vs. Growth Strategy Fund | Franklin Income vs. Ab Small Cap | Franklin Income vs. Artisan Thematic Fund | Franklin Income vs. Qs Growth Fund |
| Franklin Dynatech vs. Aam Select Income | Franklin Dynatech vs. Volumetric Fund Volumetric | Franklin Dynatech vs. Bbh Intermediate Municipal | Franklin Dynatech vs. Scharf Global Opportunity |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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