Correlation Between Franklin Convertible and Gateway Fund
Can any of the company-specific risk be diversified away by investing in both Franklin Convertible and Gateway Fund 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 Convertible and Gateway Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Vertible Securities and Gateway Fund Class, you can compare the effects of market volatilities on Franklin Convertible and Gateway Fund 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 Convertible with a short position of Gateway Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and Gateway Fund.
Diversification Opportunities for Franklin Convertible and Gateway Fund
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Gateway is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Gateway Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Fund Class and Franklin Convertible 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 Vertible Securities are associated (or correlated) with Gateway Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Fund Class has no effect on the direction of Franklin Convertible i.e., Franklin Convertible and Gateway Fund go up and down completely randomly.
Pair Corralation between Franklin Convertible and Gateway Fund
Assuming the 90 days horizon Franklin Vertible Securities is expected to generate 1.23 times more return on investment than Gateway Fund. However, Franklin Convertible is 1.23 times more volatile than Gateway Fund Class. It trades about 0.12 of its potential returns per unit of risk. Gateway Fund Class is currently generating about 0.14 per unit of risk. If you would invest 1,944 in Franklin Vertible Securities on August 31, 2024 and sell it today you would earn a total of 511.00 from holding Franklin Vertible Securities or generate 26.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Vertible Securities vs. Gateway Fund Class
Performance |
| Timeline |
| Franklin Convertible |
| Gateway Fund Class |
Franklin Convertible and Gateway Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Convertible and Gateway Fund
The main advantage of trading using opposite Franklin Convertible and Gateway Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Convertible position performs unexpectedly, Gateway Fund 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 Gateway Fund will offset losses from the drop in Gateway Fund's long position.| Franklin Convertible vs. Franklin Equity Income | Franklin Convertible vs. Franklin Utilities Fund | Franklin Convertible vs. Franklin Strategic Income | Franklin Convertible vs. Franklin Rising Dividends |
| Gateway Fund vs. Americafirst Large Cap | Gateway Fund vs. John Hancock Investment | Gateway Fund vs. Qs Large Cap | Gateway Fund vs. Aqr Large Cap |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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