Correlation Between Franklin Gold and Amcap Fund
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Amcap Fund 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 Amcap Fund 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 Amcap Fund Class, you can compare the effects of market volatilities on Franklin Gold and Amcap Fund 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 Amcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Amcap Fund.
Diversification Opportunities for Franklin Gold and Amcap Fund
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Amcap is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Amcap Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcap Fund Class 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 Amcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcap Fund Class has no effect on the direction of Franklin Gold i.e., Franklin Gold and Amcap Fund go up and down completely randomly.
Pair Corralation between Franklin Gold and Amcap Fund
Assuming the 90 days horizon Franklin Gold Precious is expected to under-perform the Amcap Fund. In addition to that, Franklin Gold is 2.05 times more volatile than Amcap Fund Class. It trades about -0.28 of its total potential returns per unit of risk. Amcap Fund Class is currently generating about 0.11 per unit of volatility. If you would invest 3,600 in Amcap Fund Class on August 30, 2024 and sell it today you would earn a total of 77.00 from holding Amcap Fund Class or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Franklin Gold Precious vs. Amcap Fund Class
Performance |
| Timeline |
| Franklin Gold Precious |
| Amcap Fund Class |
Franklin Gold and Amcap Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Amcap Fund
The main advantage of trading using opposite Franklin Gold and Amcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Amcap Fund 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 Amcap Fund will offset losses from the drop in Amcap Fund'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 |
| Amcap Fund vs. Heartland Value Plus | Amcap Fund vs. Mid Cap Growth Profund | Amcap Fund vs. Pace Smallmedium Value | Amcap Fund vs. Ab Discovery Value |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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