Correlation Between Franklin Founding and Gamco Global
Can any of the company-specific risk be diversified away by investing in both Franklin Founding and Gamco Global 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 Founding and Gamco Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Founding Funds and Gamco Global Gold, you can compare the effects of market volatilities on Franklin Founding and Gamco Global 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 Founding with a short position of Gamco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Founding and Gamco Global.
Diversification Opportunities for Franklin Founding and Gamco Global
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Gamco is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Founding Funds and Gamco Global Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Global Gold and Franklin Founding 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 Founding Funds are associated (or correlated) with Gamco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco Global Gold has no effect on the direction of Franklin Founding i.e., Franklin Founding and Gamco Global go up and down completely randomly.
Pair Corralation between Franklin Founding and Gamco Global
Assuming the 90 days horizon Franklin Founding Funds is expected to generate 0.41 times more return on investment than Gamco Global. However, Franklin Founding Funds is 2.44 times less risky than Gamco Global. It trades about 0.26 of its potential returns per unit of risk. Gamco Global Gold is currently generating about 0.06 per unit of risk. If you would invest 1,601 in Franklin Founding Funds on September 13, 2024 and sell it today you would earn a total of 31.00 from holding Franklin Founding Funds or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Founding Funds vs. Gamco Global Gold
Performance |
| Timeline |
| Franklin Founding Funds |
| Gamco Global Gold |
Franklin Founding and Gamco Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Founding and Gamco Global
The main advantage of trading using opposite Franklin Founding and Gamco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Founding position performs unexpectedly, Gamco Global 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 Gamco Global will offset losses from the drop in Gamco Global's long position.| Franklin Founding vs. Artisan High Income | Franklin Founding vs. Multisector Bond Sma | Franklin Founding vs. California Bond Fund | Franklin Founding vs. Bbh Intermediate Municipal |
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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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