Correlation Between Franklin Gold and Buffalo Dividend
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Buffalo Dividend 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 Buffalo Dividend 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 Buffalo Dividend Focus, you can compare the effects of market volatilities on Franklin Gold and Buffalo Dividend 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 Buffalo Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Buffalo Dividend.
Diversification Opportunities for Franklin Gold and Buffalo Dividend
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Buffalo is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Buffalo Dividend Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buffalo Dividend Focus 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 Buffalo Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buffalo Dividend Focus has no effect on the direction of Franklin Gold i.e., Franklin Gold and Buffalo Dividend go up and down completely randomly.
Pair Corralation between Franklin Gold and Buffalo Dividend
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 4.12 times more return on investment than Buffalo Dividend. However, Franklin Gold is 4.12 times more volatile than Buffalo Dividend Focus. It trades about 0.22 of its potential returns per unit of risk. Buffalo Dividend Focus is currently generating about 0.2 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 Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Gold Precious vs. Buffalo Dividend Focus
Performance |
| Timeline |
| Franklin Gold Precious |
| Buffalo Dividend Focus |
Franklin Gold and Buffalo Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Buffalo Dividend
The main advantage of trading using opposite Franklin Gold and Buffalo Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Buffalo Dividend 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 Buffalo Dividend will offset losses from the drop in Buffalo Dividend'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 |
| Buffalo Dividend vs. Buffalo Small Cap | Buffalo Dividend vs. Buffalo Emerging Opportunities | Buffalo Dividend vs. Buffalo Mid Cap | Buffalo Dividend vs. Buffalo International Fund |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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