Correlation Between Midas Fund and Franklin Dynatech

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

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

Diversification Opportunities for Midas Fund and Franklin Dynatech

-0.62

Correlation Coefficient

Midas Fund  Franklin Dynatech

Excellent diversification

The 3 months correlation between Midas and Franklin is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Midas Fund Midas and Franklin Dynatech Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Dynatech and Midas Fund 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 Midas Fund Midas are associated (or correlated) with Franklin Dynatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Dynatech has no effect on the direction of Midas Fund i.e., Midas Fund and Franklin Dynatech go up and down completely randomly.

Pair Corralation between Midas Fund and Franklin Dynatech

Assuming the 90 days horizon Midas Fund Midas is expected to under-perform the Franklin Dynatech. In addition to that, Midas Fund is 1.52 times more volatile than Franklin Dynatech Fund. It trades about -0.11 of its total potential returns per unit of risk. Franklin Dynatech Fund is currently generating about 0.08 per unit of volatility. If you would invest  18,024  in Franklin Dynatech Fund on October 20, 2024 and sell it today you would earn a total of  1,058  from holding Franklin Dynatech Fund or generate 5.87% return on investment over 90 days.

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

Midas Fund Midas  vs.  Franklin Dynatech Fund

Midas Fund Midas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Midas Fund Midas has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

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.

Pair Trading with Midas Fund and Franklin Dynatech

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

The idea behind Midas Fund Midas and Franklin Dynatech Fund 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.