Correlation Between Franklin Dynatech and Jpmorgan Mid

Can any of the company-specific risk be diversified away by investing in both Franklin Dynatech and Jpmorgan Mid 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 Jpmorgan Mid 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 Jpmorgan Mid Cap, you can compare the effects of market volatilities on Franklin Dynatech and Jpmorgan Mid 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 Jpmorgan Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Dynatech and Jpmorgan Mid.

Diversification Opportunities for Franklin Dynatech and Jpmorgan Mid

0.35

Correlation Coefficient

Franklin Dynatech  Jpmorgan Mid

Weak diversification

The 3 months correlation between Franklin and Jpmorgan is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Dynatech Fund and Jpmorgan Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Mid Cap 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 Jpmorgan Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Mid Cap has no effect on the direction of Franklin Dynatech i.e., Franklin Dynatech and Jpmorgan Mid go up and down completely randomly.

Pair Corralation between Franklin Dynatech and Jpmorgan Mid

Assuming the 90 days horizon Franklin Dynatech is expected to generate 2.0 times less return on investment than Jpmorgan Mid. In addition to that, Franklin Dynatech is 1.32 times more volatile than Jpmorgan Mid Cap. It trades about 0.05 of its total potential returns per unit of risk. Jpmorgan Mid Cap is currently generating about 0.14 per unit of volatility. If you would invest  5,284  in Jpmorgan Mid Cap on October 21, 2024 and sell it today you would earn a total of  133.00  from holding Jpmorgan Mid Cap or generate 2.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Franklin Dynatech Fund  vs.  Jpmorgan Mid Cap

Franklin Dynatech

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Dynatech Fund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Franklin Dynatech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Jpmorgan Mid Cap

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Mid Cap are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Jpmorgan Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Franklin Dynatech and Jpmorgan Mid

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

The idea behind Franklin Dynatech Fund and Jpmorgan Mid Cap 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.