Correlation Between Franklin Gold and Europac Gold
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Europac Gold 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 Europac Gold 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 Europac Gold Fund, you can compare the effects of market volatilities on Franklin Gold and Europac Gold 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 Europac Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Europac Gold.
Diversification Opportunities for Franklin Gold and Europac Gold
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Franklin and Europac is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Europac Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europac Gold 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 Europac Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europac Gold has no effect on the direction of Franklin Gold i.e., Franklin Gold and Europac Gold go up and down completely randomly.
Pair Corralation between Franklin Gold and Europac Gold
Assuming the 90 days horizon Franklin Gold Precious is expected to under-perform the Europac Gold. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Gold Precious is 1.1 times less risky than Europac Gold. The mutual fund trades about -0.3 of its potential returns per unit of risk. The Europac Gold Fund is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 1,246 in Europac Gold Fund on August 24, 2024 and sell it today you would lose (130.00) from holding Europac Gold Fund or give up 10.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Europac Gold Fund
Performance |
| Timeline |
| Franklin Gold Precious |
| Europac Gold |
Franklin Gold and Europac Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Europac Gold
The main advantage of trading using opposite Franklin Gold and Europac Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Europac Gold 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 Europac Gold will offset losses from the drop in Europac Gold'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 |
| Europac Gold vs. First Eagle Gold | Europac Gold vs. First Eagle Gold | Europac Gold vs. First Eagle Gold | Europac Gold vs. Oppenheimer Gold Spec |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |