Correlation Between Franklin Mutual and Dreyfus Global
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Dreyfus Global 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 Dreyfus Global 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 Dreyfus Global Equity, you can compare the effects of market volatilities on Franklin Mutual and Dreyfus Global 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 Dreyfus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Dreyfus Global.
Diversification Opportunities for Franklin Mutual and Dreyfus Global
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Dreyfus is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Dreyfus Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Global Equity 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 Dreyfus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Global Equity has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Dreyfus Global go up and down completely randomly.
Pair Corralation between Franklin Mutual and Dreyfus Global
Assuming the 90 days horizon Franklin Mutual Global is expected to generate 1.16 times more return on investment than Dreyfus Global. However, Franklin Mutual is 1.16 times more volatile than Dreyfus Global Equity. It trades about 0.25 of its potential returns per unit of risk. Dreyfus Global Equity is currently generating about 0.11 per unit of risk. If you would invest 3,124 in Franklin Mutual Global on September 1, 2024 and sell it today you would earn a total of 97.00 from holding Franklin Mutual Global or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Mutual Global vs. Dreyfus Global Equity
Performance |
| Timeline |
| Franklin Mutual Global |
| Dreyfus Global Equity |
Franklin Mutual and Dreyfus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Dreyfus Global
The main advantage of trading using opposite Franklin Mutual and Dreyfus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Dreyfus Global 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 Dreyfus Global will offset losses from the drop in Dreyfus Global's long position.| Franklin Mutual vs. Doubleline Emerging Markets | Franklin Mutual vs. Dws Emerging Markets | Franklin Mutual vs. Rbc Emerging Markets | Franklin Mutual vs. Ep Emerging Markets |
| Dreyfus Global vs. Dreyfus High Yield | Dreyfus Global vs. Dreyfusthe Boston Pany | Dreyfus Global vs. Dreyfus International Bond | Dreyfus Global vs. Dreyfus International Bond |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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