Correlation Between Franklin Growth and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Franklin Growth 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 Growth 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 Growth Opportunities and Goldman Sachs Flexible, you can compare the effects of market volatilities on Franklin Growth 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 Growth with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Goldman Sachs.
Diversification Opportunities for Franklin Growth and Goldman Sachs
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Goldman is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Goldman Sachs Flexible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Flexible and Franklin Growth 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 Growth Opportunities 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 Flexible has no effect on the direction of Franklin Growth i.e., Franklin Growth and Goldman Sachs go up and down completely randomly.
Pair Corralation between Franklin Growth and Goldman Sachs
Assuming the 90 days horizon Franklin Growth is expected to generate 1.31 times less return on investment than Goldman Sachs. In addition to that, Franklin Growth is 1.43 times more volatile than Goldman Sachs Flexible. It trades about 0.11 of its total potential returns per unit of risk. Goldman Sachs Flexible is currently generating about 0.2 per unit of volatility. If you would invest 1,629 in Goldman Sachs Flexible on August 28, 2024 and sell it today you would earn a total of 61.00 from holding Goldman Sachs Flexible or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Growth Opportunities vs. Goldman Sachs Flexible
Performance |
| Timeline |
| Franklin Growth Oppo |
| Goldman Sachs Flexible |
Franklin Growth and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Goldman Sachs
The main advantage of trading using opposite Franklin Growth and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth 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 Growth vs. Franklin Mutual Beacon | Franklin Growth vs. Templeton Developing Markets | Franklin Growth vs. Franklin Mutual Global | Franklin Growth vs. Franklin Mutual Global |
| Goldman Sachs vs. Virtus Convertible | Goldman Sachs vs. Putnam Convertible Incm Gwth | Goldman Sachs vs. Allianzgi Vertible Fund | Goldman Sachs vs. Gabelli Convertible And |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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