Correlation Between Franklin Gold and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Franklin Templeton 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 Templeton 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 Templeton Smacs, you can compare the effects of market volatilities on Franklin Gold and Franklin Templeton 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 Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Franklin Templeton.
Diversification Opportunities for Franklin Gold and Franklin Templeton
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Franklin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Franklin Templeton Smacs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton Smacs 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 Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton Smacs has no effect on the direction of Franklin Gold i.e., Franklin Gold and Franklin Templeton go up and down completely randomly.
Pair Corralation between Franklin Gold and Franklin Templeton
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 1.6 times more return on investment than Franklin Templeton. However, Franklin Gold is 1.6 times more volatile than Franklin Templeton Smacs. It trades about 0.07 of its potential returns per unit of risk. Franklin Templeton Smacs is currently generating about 0.06 per unit of risk. If you would invest 1,327 in Franklin Gold Precious on September 12, 2024 and sell it today you would earn a total of 539.00 from holding Franklin Gold Precious or generate 40.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Franklin Gold Precious vs. Franklin Templeton Smacs
Performance |
| Timeline |
| Franklin Gold Precious |
| Franklin Templeton Smacs |
Franklin Gold and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Franklin Templeton
The main advantage of trading using opposite Franklin Gold and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Franklin Templeton 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 Templeton will offset losses from the drop in Franklin Templeton's long position.| Franklin Gold vs. Columbia Global Technology | Franklin Gold vs. Towpath Technology | Franklin Gold vs. Red Oak Technology | Franklin Gold vs. Goldman Sachs Technology |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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