Correlation Between Franklin Real and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Dodge Cox 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 Real and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Real Estate and Dodge Cox International, you can compare the effects of market volatilities on Franklin Real and Dodge Cox 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 Real with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Dodge Cox.
Diversification Opportunities for Franklin Real and Dodge Cox
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between FRANKLIN and Dodge is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Dodge Cox International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox International and Franklin Real 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 Real Estate are associated (or correlated) with Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Cox International has no effect on the direction of Franklin Real i.e., Franklin Real and Dodge Cox go up and down completely randomly.
Pair Corralation between Franklin Real and Dodge Cox
Assuming the 90 days horizon Franklin Real Estate is expected to generate 1.07 times more return on investment than Dodge Cox. However, Franklin Real is 1.07 times more volatile than Dodge Cox International. It trades about 0.16 of its potential returns per unit of risk. Dodge Cox International is currently generating about 0.03 per unit of risk. If you would invest 1,622 in Franklin Real Estate on September 3, 2024 and sell it today you would earn a total of 365.00 from holding Franklin Real Estate or generate 22.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Real Estate vs. Dodge Cox International
Performance |
| Timeline |
| Franklin Real Estate |
| Dodge Cox International |
Franklin Real and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Dodge Cox
The main advantage of trading using opposite Franklin Real and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Dodge Cox 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 Dodge Cox will offset losses from the drop in Dodge Cox's long position.| Franklin Real vs. Franklin Natural Resources | Franklin Real vs. Franklin Small Cap | Franklin Real vs. Templeton Developing Markets | Franklin Real vs. Franklin Balance Sheet |
| Dodge Cox vs. Wells Fargo Funds | Dodge Cox vs. General Money Market | Dodge Cox vs. Prudential Government Money | Dodge Cox vs. John Hancock Money |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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