Correlation Between Franklin Gold and American Century
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and American Century 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 Gold and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Gold Precious and American Century Diversified, you can compare the effects of market volatilities on Franklin Gold and American Century 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 Gold with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and American Century.
Diversification Opportunities for Franklin Gold and American Century
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and American is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and American Century Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Div and Franklin Gold 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 Gold Precious are associated (or correlated) with American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century Div has no effect on the direction of Franklin Gold i.e., Franklin Gold and American Century go up and down completely randomly.
Pair Corralation between Franklin Gold and American Century
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 3.82 times more return on investment than American Century. However, Franklin Gold is 3.82 times more volatile than American Century Diversified. It trades about 0.04 of its potential returns per unit of risk. American Century Diversified is currently generating about 0.04 per unit of risk. If you would invest 1,433 in Franklin Gold Precious on September 18, 2024 and sell it today you would earn a total of 398.00 from holding Franklin Gold Precious or generate 27.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. American Century Diversified
Performance |
| Timeline |
| Franklin Gold Precious |
| American Century Div |
Franklin Gold and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and American Century
The main advantage of trading using opposite Franklin Gold and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Franklin Gold vs. Franklin Mutual Beacon | Franklin Gold vs. Templeton Developing Markets | Franklin Gold vs. Franklin Mutual Global | Franklin Gold vs. Franklin Mutual Global |
| American Century vs. Sprott Gold Equity | American Century vs. Oppenheimer Gold Special | American Century vs. Vy Goldman Sachs | American Century vs. Franklin Gold Precious |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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