Correlation Between Dupont De and Franklin Templeton

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

By analyzing existing cross correlation between Dupont De Nemours and Franklin Templeton Investments, you can compare the effects of market volatilities on Dupont De and Franklin Templeton 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 Dupont De with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Franklin Templeton.

Diversification Opportunities for Dupont De and Franklin Templeton

-0.83

Correlation Coefficient

Dupont De  Franklin Templeton

Pay attention - limited upside

The 3 months correlation between Dupont and Franklin is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Franklin Templeton Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton and Dupont De 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 Dupont De Nemours are associated (or correlated) with Franklin Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton has no effect on the direction of Dupont De i.e., Dupont De and Franklin Templeton go up and down completely randomly.

Pair Corralation between Dupont De and Franklin Templeton

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Franklin Templeton. In addition to that, Dupont De is 1.96 times more volatile than Franklin Templeton Investments. It trades about -0.01 of its total potential returns per unit of risk. Franklin Templeton Investments is currently generating about 0.07 per unit of volatility. If you would invest  3,678  in Franklin Templeton Investments on October 26, 2024 and sell it today you would earn a total of  130.00  from holding Franklin Templeton Investments or generate 3.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	58.87%
Values	Daily Returns

Dupont De Nemours  vs.  Franklin Templeton Investments

Dupont De Nemours

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dupont De Nemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Franklin Templeton

Risk-Adjusted Performance

0 of 100

Strong

Over the last 90 days Franklin Templeton Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Franklin Templeton is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Dupont De and Franklin Templeton

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

The idea behind Dupont De Nemours and Franklin Templeton Investments 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.