Correlation Between Franklin Dynatech and Clearbridge International
Can any of the company-specific risk be diversified away by investing in both Franklin Dynatech and Clearbridge International 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 Dynatech and Clearbridge International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Dynatech Fund and Clearbridge International Growth, you can compare the effects of market volatilities on Franklin Dynatech and Clearbridge International 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 Dynatech with a short position of Clearbridge International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Dynatech and Clearbridge International.
Diversification Opportunities for Franklin Dynatech and Clearbridge International
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Clearbridge is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Dynatech Fund and Clearbridge International Grow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge International and Franklin Dynatech 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 Dynatech Fund are associated (or correlated) with Clearbridge International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge International has no effect on the direction of Franklin Dynatech i.e., Franklin Dynatech and Clearbridge International go up and down completely randomly.
Pair Corralation between Franklin Dynatech and Clearbridge International
Assuming the 90 days horizon Franklin Dynatech Fund is expected to generate 1.56 times more return on investment than Clearbridge International. However, Franklin Dynatech is 1.56 times more volatile than Clearbridge International Growth. It trades about 0.11 of its potential returns per unit of risk. Clearbridge International Growth is currently generating about 0.05 per unit of risk. If you would invest 9,786 in Franklin Dynatech Fund on September 25, 2024 and sell it today you would earn a total of 9,291 from holding Franklin Dynatech Fund or generate 94.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.8% |
Values | Daily Returns |
Franklin Dynatech Fund vs. Clearbridge International Grow
Performance |
Timeline |
Franklin Dynatech |
Clearbridge International |
Franklin Dynatech and Clearbridge International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Dynatech and Clearbridge International
The main advantage of trading using opposite Franklin Dynatech and Clearbridge International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Dynatech position performs unexpectedly, Clearbridge International 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 Clearbridge International will offset losses from the drop in Clearbridge International's long position.Franklin Dynatech vs. Mfs International Diversification | Franklin Dynatech vs. John Hancock Bond | Franklin Dynatech vs. Lord Abbett Bond | Franklin Dynatech vs. Prudential Total Return |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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