Correlation Between Guidemark Smallmid and Franklin Dynatech
Can any of the company-specific risk be diversified away by investing in both Guidemark Smallmid and Franklin Dynatech 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 Guidemark Smallmid and Franklin Dynatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidemark Smallmid Cap and Franklin Dynatech Fund, you can compare the effects of market volatilities on Guidemark Smallmid and Franklin Dynatech 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 Guidemark Smallmid with a short position of Franklin Dynatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark Smallmid and Franklin Dynatech.
Diversification Opportunities for Guidemark Smallmid and Franklin Dynatech
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guidemark and Franklin is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Smallmid Cap and Franklin Dynatech Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Dynatech and Guidemark Smallmid 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 Guidemark Smallmid Cap are associated (or correlated) with Franklin Dynatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Dynatech has no effect on the direction of Guidemark Smallmid i.e., Guidemark Smallmid and Franklin Dynatech go up and down completely randomly.
Pair Corralation between Guidemark Smallmid and Franklin Dynatech
Assuming the 90 days horizon Guidemark Smallmid is expected to generate 2.02 times less return on investment than Franklin Dynatech. But when comparing it to its historical volatility, Guidemark Smallmid Cap is 1.14 times less risky than Franklin Dynatech. It trades about 0.06 of its potential returns per unit of risk. Franklin Dynatech Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 7,448 in Franklin Dynatech Fund on September 13, 2024 and sell it today you would earn a total of 6,923 from holding Franklin Dynatech Fund or generate 92.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Guidemark Smallmid Cap vs. Franklin Dynatech Fund
Performance |
| Timeline |
| Guidemark Smallmid Cap |
| Franklin Dynatech |
Guidemark Smallmid and Franklin Dynatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidemark Smallmid and Franklin Dynatech
The main advantage of trading using opposite Guidemark Smallmid and Franklin Dynatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark Smallmid position performs unexpectedly, Franklin Dynatech 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 Franklin Dynatech will offset losses from the drop in Franklin Dynatech's long position.| Guidemark Smallmid vs. General Money Market | Guidemark Smallmid vs. The Gabelli Money | Guidemark Smallmid vs. Putnam Money Market | Guidemark Smallmid vs. Schwab Treasury Money |
| Franklin Dynatech vs. Putnam Convertible Incm Gwth | Franklin Dynatech vs. Allianzgi Convertible Income | Franklin Dynatech vs. Absolute Convertible Arbitrage | Franklin Dynatech vs. Gabelli Convertible And |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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