Correlation Between Franklin Gold and First Eagle
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and First Eagle 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 Gold and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Gold Precious and First Eagle Gold, you can compare the effects of market volatilities on Franklin Gold and First Eagle 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 Gold with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and First Eagle.
Diversification Opportunities for Franklin Gold and First Eagle
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and First is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and First Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Gold and Franklin Gold 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 Gold Precious are associated (or correlated) with First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Gold has no effect on the direction of Franklin Gold i.e., Franklin Gold and First Eagle go up and down completely randomly.
Pair Corralation between Franklin Gold and First Eagle
Assuming the 90 days horizon Franklin Gold Precious is expected to under-perform the First Eagle. In addition to that, Franklin Gold is 1.04 times more volatile than First Eagle Gold. It trades about -0.28 of its total potential returns per unit of risk. First Eagle Gold is currently generating about -0.21 per unit of volatility. If you would invest 3,108 in First Eagle Gold on August 28, 2024 and sell it today you would lose (268.00) from holding First Eagle Gold or give up 8.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. First Eagle Gold
Performance |
| Timeline |
| Franklin Gold Precious |
| First Eagle Gold |
Franklin Gold and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and First Eagle
The main advantage of trading using opposite Franklin Gold and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| Franklin Gold vs. Franklin Mutual Beacon | Franklin Gold vs. Templeton Developing Markets | Franklin Gold vs. Franklin Mutual Global | Franklin Gold vs. Franklin Mutual Global |
| First Eagle vs. Gabelli Gold Fund | First Eagle vs. International Investors Gold | First Eagle vs. Gold And Precious | First Eagle vs. Wells Fargo Advantage |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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