Correlation Between Franklin Mutual and Dunham Real
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Dunham Real 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 Mutual and Dunham Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual Global and Dunham Real Estate, you can compare the effects of market volatilities on Franklin Mutual and Dunham Real 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 Mutual with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Dunham Real.
Diversification Opportunities for Franklin Mutual and Dunham Real
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Dunham is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Dunham Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Real Estate and Franklin Mutual 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 Mutual Global are associated (or correlated) with Dunham Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Real Estate has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Dunham Real go up and down completely randomly.
Pair Corralation between Franklin Mutual and Dunham Real
Assuming the 90 days horizon Franklin Mutual Global is expected to under-perform the Dunham Real. In addition to that, Franklin Mutual is 1.3 times more volatile than Dunham Real Estate. It trades about -0.18 of its total potential returns per unit of risk. Dunham Real Estate is currently generating about -0.12 per unit of volatility. If you would invest 1,520 in Dunham Real Estate on September 30, 2024 and sell it today you would lose (118.00) from holding Dunham Real Estate or give up 7.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Global vs. Dunham Real Estate
Performance |
| Timeline |
| Franklin Mutual Global |
| Dunham Real Estate |
Franklin Mutual and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Dunham Real
The main advantage of trading using opposite Franklin Mutual and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Dunham Real 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 Real will offset losses from the drop in Dunham Real's long position.| Franklin Mutual vs. Franklin Mutual Beacon | Franklin Mutual vs. Templeton Developing Markets | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Templeton Foreign Fund |
| Dunham Real vs. Realty Income | Dunham Real vs. Dynex Capital | Dunham Real vs. First Industrial Realty | Dunham Real vs. Healthcare Realty Trust |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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