Correlation Between Franklin Gold and Fidelity Stock
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Fidelity Stock 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 Fidelity Stock 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 Fidelity Stock Selector, you can compare the effects of market volatilities on Franklin Gold and Fidelity Stock 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 Fidelity Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Fidelity Stock.
Diversification Opportunities for Franklin Gold and Fidelity Stock
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Fidelity is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Fidelity Stock Selector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Stock Selector 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 Fidelity Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Stock Selector has no effect on the direction of Franklin Gold i.e., Franklin Gold and Fidelity Stock go up and down completely randomly.
Pair Corralation between Franklin Gold and Fidelity Stock
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 3.45 times more return on investment than Fidelity Stock. However, Franklin Gold is 3.45 times more volatile than Fidelity Stock Selector. It trades about 0.22 of its potential returns per unit of risk. Fidelity Stock Selector is currently generating about -0.03 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 | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Fidelity Stock Selector
Performance |
| Timeline |
| Franklin Gold Precious |
| Fidelity Stock Selector |
Franklin Gold and Fidelity Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Fidelity Stock
The main advantage of trading using opposite Franklin Gold and Fidelity Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Fidelity Stock 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 Fidelity Stock will offset losses from the drop in Fidelity Stock'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 |
| Fidelity Stock vs. The Gabelli Healthcare | Fidelity Stock vs. Baillie Gifford Health | Fidelity Stock vs. Blackrock Health Sciences | Fidelity Stock vs. Deutsche Health And |
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 CEOs Directory module to screen CEOs from public companies around the world.
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