Correlation Between Franklin Gold and Cavanal Hill
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Cavanal Hill 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 Cavanal Hill 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 Cavanal Hill Funds, you can compare the effects of market volatilities on Franklin Gold and Cavanal Hill 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 Cavanal Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Cavanal Hill.
Diversification Opportunities for Franklin Gold and Cavanal Hill
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Cavanal is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Cavanal Hill Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cavanal Hill Funds 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 Cavanal Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cavanal Hill Funds has no effect on the direction of Franklin Gold i.e., Franklin Gold and Cavanal Hill go up and down completely randomly.
Pair Corralation between Franklin Gold and Cavanal Hill
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 12.57 times more return on investment than Cavanal Hill. However, Franklin Gold is 12.57 times more volatile than Cavanal Hill Funds. It trades about 0.08 of its potential returns per unit of risk. Cavanal Hill Funds is currently generating about 0.14 per unit of risk. If you would invest 1,303 in Franklin Gold Precious on September 15, 2024 and sell it today you would earn a total of 528.00 from holding Franklin Gold Precious or generate 40.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Cavanal Hill Funds
Performance |
| Timeline |
| Franklin Gold Precious |
| Cavanal Hill Funds |
Franklin Gold and Cavanal Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Cavanal Hill
The main advantage of trading using opposite Franklin Gold and Cavanal Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Cavanal Hill 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 Cavanal Hill will offset losses from the drop in Cavanal Hill'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 |
| Cavanal Hill vs. Vanguard Total Stock | Cavanal Hill vs. Vanguard 500 Index | Cavanal Hill vs. Vanguard Total Stock | Cavanal Hill vs. Vanguard Total Stock |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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