Correlation Between Franklin High and Gamco International
Can any of the company-specific risk be diversified away by investing in both Franklin High and Gamco International 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 High and Gamco International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin High Yield and Gamco International Growth, you can compare the effects of market volatilities on Franklin High and Gamco International 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 High with a short position of Gamco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Gamco International.
Diversification Opportunities for Franklin High and Gamco International
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Gamco is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Gamco International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco International and Franklin High 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 High Yield are associated (or correlated) with Gamco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco International has no effect on the direction of Franklin High i.e., Franklin High and Gamco International go up and down completely randomly.
Pair Corralation between Franklin High and Gamco International
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.29 times more return on investment than Gamco International. However, Franklin High Yield is 3.43 times less risky than Gamco International. It trades about 0.15 of its potential returns per unit of risk. Gamco International Growth is currently generating about -0.01 per unit of risk. If you would invest 828.00 in Franklin High Yield on September 3, 2024 and sell it today you would earn a total of 89.00 from holding Franklin High Yield or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Gamco International Growth
Performance |
| Timeline |
| Franklin High Yield |
| Gamco International |
Franklin High and Gamco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Gamco International
The main advantage of trading using opposite Franklin High and Gamco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Gamco International 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 International will offset losses from the drop in Gamco International's long position.| Franklin High vs. Nuveen High Yield | Franklin High vs. Nuveen High Yield | Franklin High vs. Nuveen High Yield | Franklin High vs. Nuveen High Yield |
| Gamco International vs. Gamco Global Telecommunications | Gamco International vs. Intermediate Term Tax Free Bond | Gamco International vs. Victory High Income | Gamco International vs. Franklin High Yield |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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