Correlation Between Franklin Resources and Marygold Companies
Can any of the company-specific risk be diversified away by investing in both Franklin Resources and Marygold Companies 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 Resources and Marygold Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Resources and Marygold Companies, you can compare the effects of market volatilities on Franklin Resources and Marygold Companies 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 Resources with a short position of Marygold Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Resources and Marygold Companies.
Diversification Opportunities for Franklin Resources and Marygold Companies
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Marygold is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Resources and Marygold Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marygold Companies and Franklin Resources 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 Resources are associated (or correlated) with Marygold Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marygold Companies has no effect on the direction of Franklin Resources i.e., Franklin Resources and Marygold Companies go up and down completely randomly.
Pair Corralation between Franklin Resources and Marygold Companies
Considering the 90-day investment horizon Franklin Resources is expected to generate 0.43 times more return on investment than Marygold Companies. However, Franklin Resources is 2.32 times less risky than Marygold Companies. It trades about 0.08 of its potential returns per unit of risk. Marygold Companies is currently generating about -0.37 per unit of risk. If you would invest 1,980 in Franklin Resources on November 9, 2024 and sell it today you would earn a total of 79.00 from holding Franklin Resources or generate 3.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Resources vs. Marygold Companies
Performance |
| Timeline |
| Franklin Resources |
| Marygold Companies |
Franklin Resources and Marygold Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Resources and Marygold Companies
The main advantage of trading using opposite Franklin Resources and Marygold Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Resources position performs unexpectedly, Marygold Companies 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 Marygold Companies will offset losses from the drop in Marygold Companies' long position.| Franklin Resources vs. BlackRock | Franklin Resources vs. Main Street Capital | Franklin Resources vs. Blackstone Group | Franklin Resources vs. Ares Capital |
| Marygold Companies vs. MFS Investment Grade | Marygold Companies vs. Eaton Vance National | Marygold Companies vs. Nuveen California Select | Marygold Companies vs. Federated Premier Municipal |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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