Correlation Between Dreyfus Yield and Franklin Government

Can any of the company-specific risk be diversified away by investing in both Dreyfus Yield and Franklin Government 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 Dreyfus Yield and Franklin Government into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dreyfus Yield Enhancement and Franklin Government Money, you can compare the effects of market volatilities on Dreyfus Yield and Franklin Government 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 Dreyfus Yield with a short position of Franklin Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Yield and Franklin Government.

Diversification Opportunities for Dreyfus Yield and Franklin Government

0.0

Correlation Coefficient

Dreyfus Yield  Franklin Government

Pay attention - limited upside

The 3 months correlation between Dreyfus and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Yield Enhancement and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money and Dreyfus Yield 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 Dreyfus Yield Enhancement are associated (or correlated) with Franklin Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Dreyfus Yield i.e., Dreyfus Yield and Franklin Government go up and down completely randomly.

Pair Corralation between Dreyfus Yield and Franklin Government

If you would invest  1,108  in Dreyfus Yield Enhancement on December 22, 2024 and sell it today you would earn a total of  15.00  from holding Dreyfus Yield Enhancement or generate 1.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dreyfus Yield Enhancement  vs.  Franklin Government Money

Dreyfus Yield Enhancement

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus Yield Enhancement are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking indicators, Dreyfus Yield is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Franklin Government Money

Risk-Adjusted Performance

Very Weak

Over the last 90 days Franklin Government Money has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Franklin Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dreyfus Yield and Franklin Government

The main advantage of trading using opposite Dreyfus Yield and Franklin Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Yield position performs unexpectedly, Franklin Government 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 Government will offset losses from the drop in Franklin Government's long position.

The idea behind Dreyfus Yield Enhancement and Franklin Government Money pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.