Correlation Between Franklin New and Dreyfus New
Can any of the company-specific risk be diversified away by investing in both Franklin New and Dreyfus New 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 New and Dreyfus New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin New York and Dreyfus New York, you can compare the effects of market volatilities on Franklin New and Dreyfus New 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 New with a short position of Dreyfus New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin New and Dreyfus New.
Diversification Opportunities for Franklin New and Dreyfus New
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Dreyfus is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Franklin New York and Dreyfus New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus New York and Franklin New 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 New York are associated (or correlated) with Dreyfus New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus New York has no effect on the direction of Franklin New i.e., Franklin New and Dreyfus New go up and down completely randomly.
Pair Corralation between Franklin New and Dreyfus New
Assuming the 90 days horizon Franklin New is expected to generate 1.35 times less return on investment than Dreyfus New. But when comparing it to its historical volatility, Franklin New York is 1.36 times less risky than Dreyfus New. It trades about 0.2 of its potential returns per unit of risk. Dreyfus New York is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,364 in Dreyfus New York on September 1, 2024 and sell it today you would earn a total of 18.00 from holding Dreyfus New York or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin New York vs. Dreyfus New York
Performance |
| Timeline |
| Franklin New York |
| Dreyfus New York |
Franklin New and Dreyfus New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin New and Dreyfus New
The main advantage of trading using opposite Franklin New and Dreyfus New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin New position performs unexpectedly, Dreyfus New 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 New will offset losses from the drop in Dreyfus New's long position.| Franklin New vs. Franklin Mutual Beacon | Franklin New vs. Templeton Developing Markets | Franklin New vs. Franklin Mutual Global | Franklin New vs. Franklin Mutual Global |
| Dreyfus New vs. Dreyfusstandish Global Fixed | Dreyfus New vs. Dreyfusstandish Global Fixed | Dreyfus New vs. Dreyfus High Yield | Dreyfus New 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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