Correlation Between Invesco Technology and Franklin Dynatech
Can any of the company-specific risk be diversified away by investing in both Invesco Technology 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 Invesco Technology and Franklin Dynatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Technology Fund and Franklin Dynatech Fund, you can compare the effects of market volatilities on Invesco Technology 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 Invesco Technology with a short position of Franklin Dynatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Technology and Franklin Dynatech.
Diversification Opportunities for Invesco Technology and Franklin Dynatech
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and Franklin is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Technology Fund and Franklin Dynatech Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Dynatech and Invesco Technology 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 Invesco Technology Fund 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 Invesco Technology i.e., Invesco Technology and Franklin Dynatech go up and down completely randomly.
Pair Corralation between Invesco Technology and Franklin Dynatech
Assuming the 90 days horizon Invesco Technology Fund is expected to generate 1.29 times more return on investment than Franklin Dynatech. However, Invesco Technology is 1.29 times more volatile than Franklin Dynatech Fund. It trades about 0.35 of its potential returns per unit of risk. Franklin Dynatech Fund is currently generating about 0.29 per unit of risk. If you would invest 6,672 in Invesco Technology Fund on September 1, 2024 and sell it today you would earn a total of 681.00 from holding Invesco Technology Fund or generate 10.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Invesco Technology Fund vs. Franklin Dynatech Fund
Performance |
| Timeline |
| Invesco Technology |
| Franklin Dynatech |
Invesco Technology and Franklin Dynatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Technology and Franklin Dynatech
The main advantage of trading using opposite Invesco Technology and Franklin Dynatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Technology 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.| Invesco Technology vs. Gamco Global Gold | Invesco Technology vs. Europac Gold Fund | Invesco Technology vs. Gold And Precious | Invesco Technology vs. Global Gold Fund |
| Franklin Dynatech vs. Mfs International Diversification | Franklin Dynatech vs. John Hancock Bond | Franklin Dynatech vs. Prudential Total Return | Franklin Dynatech vs. New World Fund |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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