Correlation Between Champlain Small and Franklin Gold
Can any of the company-specific risk be diversified away by investing in both Champlain Small 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 Champlain Small and Franklin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Franklin Gold Precious, you can compare the effects of market volatilities on Champlain Small 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 Champlain Small with a short position of Franklin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Franklin Gold.
Diversification Opportunities for Champlain Small and Franklin Gold
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Champlain and Franklin is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small 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 Champlain Small 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 Champlain Small 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 Champlain Small i.e., Champlain Small and Franklin Gold go up and down completely randomly.
Pair Corralation between Champlain Small and Franklin Gold
Assuming the 90 days horizon Champlain Small is expected to generate 0.7 times more return on investment than Franklin Gold. However, Champlain Small is 1.42 times less risky than Franklin Gold. It trades about 0.02 of its potential returns per unit of risk. Franklin Gold Precious is currently generating about 0.01 per unit of risk. If you would invest 2,074 in Champlain Small on October 11, 2024 and sell it today you would earn a total of 182.00 from holding Champlain Small or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. Franklin Gold Precious
Performance |
| Timeline |
| Champlain Small |
| Franklin Gold Precious |
Champlain Small and Franklin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Franklin Gold
The main advantage of trading using opposite Champlain Small and Franklin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small 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.| Champlain Small vs. The Hartford Midcap | Champlain Small vs. Mfs Emerging Markets | Champlain Small vs. Wells Fargo Special | Champlain Small vs. Washington Mutual Investors |
| Franklin Gold vs. Lebenthal Lisanti Small | Franklin Gold vs. Champlain Small | Franklin Gold vs. Df Dent Small | Franklin Gold vs. Touchstone Small Cap |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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