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
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Dreyfus is 0.91. 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 York is expected to generate 0.79 times more return on investment than Dreyfus New. However, Franklin New York is 1.27 times less risky than Dreyfus New. It trades about 0.3 of its potential returns per unit of risk. Dreyfus New York is currently generating about 0.18 per unit of risk. If you would invest 1,074 in Franklin New York on November 29, 2024 and sell it today you would earn a total of 11.00 from holding Franklin New York or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| 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. Small Pany Growth | Franklin New vs. Touchstone Small Cap | Franklin New vs. Nuveen Small Cap | Franklin New vs. Ashmore Emerging Markets |
| Dreyfus New vs. Ab High Income | Dreyfus New vs. Barings High Yield | Dreyfus New vs. Mesirow Financial High | Dreyfus New vs. Aqr Risk Parity |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |