Correlation Between Federated Hermes and Franklin Gold
Can any of the company-specific risk be diversified away by investing in both Federated Hermes 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 Federated Hermes and Franklin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Hermes Conservative and Franklin Gold Precious, you can compare the effects of market volatilities on Federated Hermes 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 Federated Hermes with a short position of Franklin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Franklin Gold.
Diversification Opportunities for Federated Hermes and Franklin Gold
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federated and Franklin is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Conservative 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 Federated Hermes 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 Federated Hermes Conservative 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 Federated Hermes i.e., Federated Hermes and Franklin Gold go up and down completely randomly.
Pair Corralation between Federated Hermes and Franklin Gold
Assuming the 90 days horizon Federated Hermes is expected to generate 16.49 times less return on investment than Franklin Gold. But when comparing it to its historical volatility, Federated Hermes Conservative is 11.59 times less risky than Franklin Gold. It trades about 0.22 of its potential returns per unit of risk. Franklin Gold Precious is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,505 in Franklin Gold Precious on October 22, 2024 and sell it today you would earn a total of 101.00 from holding Franklin Gold Precious or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Conservative vs. Franklin Gold Precious
Performance |
| Timeline |
| Federated Hermes Con |
| Franklin Gold Precious |
Federated Hermes and Franklin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Franklin Gold
The main advantage of trading using opposite Federated Hermes and Franklin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes 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.| Federated Hermes vs. Tax Managed Mid Small | Federated Hermes vs. Shelton Funds | Federated Hermes vs. Predex Funds | Federated Hermes vs. Growth Fund Of |
| Franklin Gold vs. Calvert Conservative Allocation | Franklin Gold vs. Stone Ridge Diversified | Franklin Gold vs. Federated Hermes Conservative | Franklin Gold vs. Tax Free Conservative Income |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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