Correlation Between Franklin Government and Dana Epiphany
Can any of the company-specific risk be diversified away by investing in both Franklin Government and Dana Epiphany 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 Dana Epiphany 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 Dana Epiphany Esg, you can compare the effects of market volatilities on Franklin Government and Dana Epiphany 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 Dana Epiphany. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Dana Epiphany.
Diversification Opportunities for Franklin Government and Dana Epiphany
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Dana is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Dana Epiphany Esg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Epiphany Esg 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 Dana Epiphany. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Epiphany Esg has no effect on the direction of Franklin Government i.e., Franklin Government and Dana Epiphany go up and down completely randomly.
Pair Corralation between Franklin Government and Dana Epiphany
Assuming the 90 days horizon Franklin Government is expected to generate 5.97 times less return on investment than Dana Epiphany. But when comparing it to its historical volatility, Franklin Government Money is 6.69 times less risky than Dana Epiphany. It trades about 0.12 of its potential returns per unit of risk. Dana Epiphany Esg is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,194 in Dana Epiphany Esg on September 12, 2024 and sell it today you would earn a total of 410.00 from holding Dana Epiphany Esg or generate 34.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Dana Epiphany Esg
Performance |
| Timeline |
| Franklin Government Money |
| Dana Epiphany Esg |
Franklin Government and Dana Epiphany Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Government and Dana Epiphany
The main advantage of trading using opposite Franklin Government and Dana Epiphany positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government position performs unexpectedly, Dana Epiphany 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 Dana Epiphany will offset losses from the drop in Dana Epiphany's long position.| Franklin Government vs. Buffalo High Yield | Franklin Government vs. Fidelity Capital Income | Franklin Government vs. T Rowe Price | Franklin Government vs. Prudential High Yield |
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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 Stocks Directory module to find actively traded stocks across global markets.
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