Correlation Between Barings Global and Franklin Gold
Can any of the company-specific risk be diversified away by investing in both Barings Global and Franklin Gold 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 Barings Global and Franklin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Floating and Franklin Gold Precious, you can compare the effects of market volatilities on Barings Global and Franklin Gold 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 Barings Global with a short position of Franklin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Franklin Gold.
Diversification Opportunities for Barings Global and Franklin Gold
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barings and Franklin is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Franklin Gold Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Gold Precious and Barings Global 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 Barings Global Floating are associated (or correlated) with Franklin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Gold Precious has no effect on the direction of Barings Global i.e., Barings Global and Franklin Gold go up and down completely randomly.
Pair Corralation between Barings Global and Franklin Gold
Assuming the 90 days horizon Barings Global Floating is not expected to generate positive returns. However, Barings Global Floating is 17.09 times less risky than Franklin Gold. It waists most of its returns potential to compensate for thr risk taken. Franklin Gold is generating about 0.54 per unit of risk. If you would invest 1,536 in Franklin Gold Precious on November 5, 2024 and sell it today you would earn a total of 187.00 from holding Franklin Gold Precious or generate 12.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Franklin Gold Precious
Performance |
| Timeline |
| Barings Global Floating |
| Franklin Gold Precious |
Barings Global and Franklin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Franklin Gold
The main advantage of trading using opposite Barings Global and Franklin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Franklin Gold 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 Gold will offset losses from the drop in Franklin Gold's long position.| Barings Global vs. Financial Industries Fund | Barings Global vs. Cref Money Market | Barings Global vs. Gabelli Global Financial | Barings Global vs. Hewitt Money Market |
| Franklin Gold vs. Great West Moderately Aggressive | Franklin Gold vs. Sierra E Retirement | Franklin Gold vs. Calvert Moderate Allocation | Franklin Gold vs. American Funds Retirement |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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