Correlation Between Franklin Strategic and Franklin Gold
Can any of the company-specific risk be diversified away by investing in both Franklin Strategic 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 Franklin Strategic and Franklin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Strategic Series and Franklin Gold And, you can compare the effects of market volatilities on Franklin Strategic 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 Franklin Strategic with a short position of Franklin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Strategic and Franklin Gold.
Diversification Opportunities for Franklin Strategic and Franklin Gold
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Franklin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Strategic Series and Franklin Gold And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Gold And and Franklin Strategic 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 Strategic Series 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 And has no effect on the direction of Franklin Strategic i.e., Franklin Strategic and Franklin Gold go up and down completely randomly.
Pair Corralation between Franklin Strategic and Franklin Gold
Assuming the 90 days horizon Franklin Strategic is expected to generate 1.72 times less return on investment than Franklin Gold. But when comparing it to its historical volatility, Franklin Strategic Series is 4.1 times less risky than Franklin Gold. It trades about 0.14 of its potential returns per unit of risk. Franklin Gold And is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,238 in Franklin Gold And on September 2, 2024 and sell it today you would earn a total of 128.00 from holding Franklin Gold And or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Strategic Series vs. Franklin Gold And
Performance |
| Timeline |
| Franklin Strategic Series |
| Franklin Gold And |
Franklin Strategic and Franklin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Strategic and Franklin Gold
The main advantage of trading using opposite Franklin Strategic and Franklin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Strategic 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.| Franklin Strategic vs. Franklin Mutual Beacon | Franklin Strategic vs. Templeton Developing Markets | Franklin Strategic vs. Franklin Mutual Global | Franklin Strategic vs. Franklin Mutual Global |
| Franklin Gold vs. Franklin Mutual Beacon | Franklin Gold vs. Templeton Developing Markets | Franklin Gold vs. Franklin Mutual Global | Franklin Gold vs. Franklin Mutual Global |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |