Correlation Between Franklin Income and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Franklin Income and Goldman Sachs 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 Income and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Income and Goldman Sachs Government, you can compare the effects of market volatilities on Franklin Income and Goldman Sachs 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 Income with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Income and Goldman Sachs.
Diversification Opportunities for Franklin Income and Goldman Sachs
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Goldman is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Income and Goldman Sachs Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Government and Franklin Income 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 Income are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Government has no effect on the direction of Franklin Income i.e., Franklin Income and Goldman Sachs go up and down completely randomly.
Pair Corralation between Franklin Income and Goldman Sachs
Assuming the 90 days horizon Franklin Income is expected to generate 1.01 times more return on investment than Goldman Sachs. However, Franklin Income is 1.01 times more volatile than Goldman Sachs Government. It trades about 0.14 of its potential returns per unit of risk. Goldman Sachs Government is currently generating about 0.07 per unit of risk. If you would invest 224.00 in Franklin Income on September 3, 2024 and sell it today you would earn a total of 19.00 from holding Franklin Income or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Income vs. Goldman Sachs Government
Performance |
| Timeline |
| Franklin Income |
| Goldman Sachs Government |
Franklin Income and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Income and Goldman Sachs
The main advantage of trading using opposite Franklin Income and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Income position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Franklin Income vs. Dreyfusstandish Global Fixed | Franklin Income vs. Ultra Short Fixed Income | Franklin Income vs. Ms Global Fixed | Franklin Income vs. T Rowe Price |
| Goldman Sachs vs. Fa 529 Aggressive | Goldman Sachs vs. Leggmason Partners Institutional | Goldman Sachs vs. Rbc Microcap Value | Goldman Sachs vs. Volumetric Fund Volumetric |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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