Correlation Between Franklin Gold and Invesco International
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Invesco International 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 Invesco International 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 Invesco International Growth, you can compare the effects of market volatilities on Franklin Gold and Invesco International 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 Invesco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Invesco International.
Diversification Opportunities for Franklin Gold and Invesco International
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Invesco is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Invesco International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco International 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 Invesco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco International has no effect on the direction of Franklin Gold i.e., Franklin Gold and Invesco International go up and down completely randomly.
Pair Corralation between Franklin Gold and Invesco International
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 3.0 times more return on investment than Invesco International. However, Franklin Gold is 3.0 times more volatile than Invesco International Growth. It trades about 0.22 of its potential returns per unit of risk. Invesco International Growth is currently generating about 0.09 per unit of risk. If you would invest 1,777 in Franklin Gold Precious on September 13, 2024 and sell it today you would earn a total of 141.00 from holding Franklin Gold Precious or generate 7.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Invesco International Growth
Performance |
| Timeline |
| Franklin Gold Precious |
| Invesco International |
Franklin Gold and Invesco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Invesco International
The main advantage of trading using opposite Franklin Gold and Invesco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Invesco International 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 Invesco International will offset losses from the drop in Invesco International'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 |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |