Correlation Between Franklin Louisiana and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Franklin Louisiana 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 Louisiana 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 Louisiana Tax Free and Dow Jones Industrial, you can compare the effects of market volatilities on Franklin Louisiana 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 Louisiana with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Louisiana and Dow Jones.
Diversification Opportunities for Franklin Louisiana and Dow Jones
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Dow is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Louisiana Tax Free 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 Louisiana 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 Louisiana Tax Free 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 Louisiana i.e., Franklin Louisiana and Dow Jones go up and down completely randomly.
Pair Corralation between Franklin Louisiana and Dow Jones
Assuming the 90 days horizon Franklin Louisiana is expected to generate 4.73 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Franklin Louisiana Tax Free is 2.59 times less risky than Dow Jones. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,361,869 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 1,110,337 from holding Dow Jones Industrial or generate 33.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Louisiana Tax Free vs. Dow Jones Industrial
Performance |
| Timeline |
Franklin Louisiana and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Franklin Louisiana Tax Free
Pair trading matchups for Franklin Louisiana
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Franklin Louisiana and Dow Jones
The main advantage of trading using opposite Franklin Louisiana and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Louisiana 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 Louisiana vs. Touchstone Ohio Tax | Franklin Louisiana vs. Nebraska Municipal Fund | Franklin Louisiana vs. Transamerica Funds | Franklin Louisiana vs. T Rowe Price |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |