Correlation Between Franklin Templeton and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Goldman Sachs 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 Templeton and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton ETF and Goldman Sachs Nasdaq 100, you can compare the effects of market volatilities on Franklin Templeton and Goldman Sachs 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 Templeton with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Goldman Sachs.
Diversification Opportunities for Franklin Templeton and Goldman Sachs
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Goldman is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Goldman Sachs Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Nasdaq and Franklin Templeton 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 Templeton ETF are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Nasdaq has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Goldman Sachs go up and down completely randomly.
Pair Corralation between Franklin Templeton and Goldman Sachs
Given the investment horizon of 90 days Franklin Templeton is expected to generate 2.69 times less return on investment than Goldman Sachs. In addition to that, Franklin Templeton is 1.12 times more volatile than Goldman Sachs Nasdaq 100. It trades about 0.03 of its total potential returns per unit of risk. Goldman Sachs Nasdaq 100 is currently generating about 0.08 per unit of volatility. If you would invest 4,477 in Goldman Sachs Nasdaq 100 on November 28, 2024 and sell it today you would earn a total of 398.00 from holding Goldman Sachs Nasdaq 100 or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton ETF vs. Goldman Sachs Nasdaq 100
Performance |
| Timeline |
| Franklin Templeton ETF |
| Goldman Sachs Nasdaq |
Franklin Templeton and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Goldman Sachs
The main advantage of trading using opposite Franklin Templeton and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Franklin Templeton vs. Franklin Core Dividend | Franklin Templeton vs. Franklin International Core | Franklin Templeton vs. WisdomTree Trust | Franklin Templeton vs. First Trust Exchange Traded |
| Goldman Sachs vs. Strategy Shares | Goldman Sachs vs. Freedom Day Dividend | Goldman Sachs vs. Franklin Templeton ETF | Goldman Sachs vs. iShares MSCI China |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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