Correlation Between Franklin Gold and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Europacific Growth 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 Europacific Growth 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 Europacific Growth Fund, you can compare the effects of market volatilities on Franklin Gold and Europacific Growth 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 Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Europacific Growth.
Diversification Opportunities for Franklin Gold and Europacific Growth
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Europacific is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific Growth 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 Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of Franklin Gold i.e., Franklin Gold and Europacific Growth go up and down completely randomly.
Pair Corralation between Franklin Gold and Europacific Growth
Assuming the 90 days horizon Franklin Gold Precious is expected to under-perform the Europacific Growth. In addition to that, Franklin Gold is 2.83 times more volatile than Europacific Growth Fund. It trades about -0.31 of its total potential returns per unit of risk. Europacific Growth Fund is currently generating about -0.4 per unit of volatility. If you would invest 5,660 in Europacific Growth Fund on October 8, 2024 and sell it today you would lose (464.00) from holding Europacific Growth Fund or give up 8.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Europacific Growth Fund
Performance |
| Timeline |
| Franklin Gold Precious |
| Europacific Growth |
Franklin Gold and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Europacific Growth
The main advantage of trading using opposite Franklin Gold and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Europacific Growth 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 Europacific Growth will offset losses from the drop in Europacific Growth's long position.| Franklin Gold vs. First Eagle Gold | Franklin Gold vs. First Eagle Gold | Franklin Gold vs. First Eagle Gold | Franklin Gold vs. Oppenheimer Gold Spec |
| Europacific Growth vs. Qs Global Equity | Europacific Growth vs. Transamerica Asset Allocation | Europacific Growth vs. Tax Managed Large Cap | Europacific Growth vs. T Rowe Price |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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