Correlation Between Franklin Gold and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Franklin Growth 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 Franklin Growth 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 Franklin Growth Fund, you can compare the effects of market volatilities on Franklin Gold and Franklin Growth 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 Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Franklin Growth.
Diversification Opportunities for Franklin Gold and Franklin Growth
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Franklin is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Franklin Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth 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 Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth has no effect on the direction of Franklin Gold i.e., Franklin Gold and Franklin Growth go up and down completely randomly.
Pair Corralation between Franklin Gold and Franklin Growth
Assuming the 90 days horizon Franklin Gold Precious is expected to under-perform the Franklin Growth. In addition to that, Franklin Gold is 1.77 times more volatile than Franklin Growth Fund. It trades about -0.22 of its total potential returns per unit of risk. Franklin Growth Fund is currently generating about -0.38 per unit of volatility. If you would invest 15,044 in Franklin Growth Fund on October 16, 2024 and sell it today you would lose (1,770) from holding Franklin Growth Fund or give up 11.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Franklin Growth Fund
Performance |
| Timeline |
| Franklin Gold Precious |
| Franklin Growth |
Franklin Gold and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Franklin Growth
The main advantage of trading using opposite Franklin Gold and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Franklin Growth 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 Franklin Growth will offset losses from the drop in Franklin Growth's long position.| Franklin Gold vs. California Bond Fund | Franklin Gold vs. Blrc Sgy Mnp | Franklin Gold vs. T Rowe Price | Franklin Gold vs. T Rowe Price |
| Franklin Growth vs. Deutsche Gold Precious | Franklin Growth vs. Short Precious Metals | Franklin Growth vs. James Balanced Golden | Franklin Growth vs. Franklin Gold Precious |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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