Correlation Between Franklin Government and Dunham Dynamic
Can any of the company-specific risk be diversified away by investing in both Franklin Government and Dunham Dynamic 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 Government and Dunham Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Government Money and Dunham Dynamic Macro, you can compare the effects of market volatilities on Franklin Government and Dunham Dynamic 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 Government with a short position of Dunham Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Dunham Dynamic.
Diversification Opportunities for Franklin Government and Dunham Dynamic
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Dunham is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Dunham Dynamic Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Dynamic Macro and Franklin Government 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 Government Money are associated (or correlated) with Dunham Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Dynamic Macro has no effect on the direction of Franklin Government i.e., Franklin Government and Dunham Dynamic go up and down completely randomly.
Pair Corralation between Franklin Government and Dunham Dynamic
If you would invest 1,248 in Dunham Dynamic Macro on September 15, 2024 and sell it today you would earn a total of 10.00 from holding Dunham Dynamic Macro or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Dunham Dynamic Macro
Performance |
| Timeline |
| Franklin Government Money |
| Dunham Dynamic Macro |
Franklin Government and Dunham Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Government and Dunham Dynamic
The main advantage of trading using opposite Franklin Government and Dunham Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government position performs unexpectedly, Dunham Dynamic 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 Dunham Dynamic will offset losses from the drop in Dunham Dynamic's long position.| Franklin Government vs. Strategic Advisers Income | Franklin Government vs. Gmo High Yield | Franklin Government vs. Guggenheim High Yield | Franklin Government vs. Prudential High Yield |
| Dunham Dynamic vs. Dunham Appreciation Income | Dunham Dynamic vs. Dunham Porategovernment Bond | Dunham Dynamic vs. Dunham Small Cap | Dunham Dynamic vs. Dunham Emerging Markets |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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