Correlation Between Franklin Gold and Pear Tree
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Pear Tree 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 Pear Tree 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 Pear Tree Essex, you can compare the effects of market volatilities on Franklin Gold and Pear Tree 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 Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Pear Tree.
Diversification Opportunities for Franklin Gold and Pear Tree
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Pear is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Pear Tree Essex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Essex 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 Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Essex has no effect on the direction of Franklin Gold i.e., Franklin Gold and Pear Tree go up and down completely randomly.
Pair Corralation between Franklin Gold and Pear Tree
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 1.29 times more return on investment than Pear Tree. However, Franklin Gold is 1.29 times more volatile than Pear Tree Essex. It trades about 0.04 of its potential returns per unit of risk. Pear Tree Essex is currently generating about -0.01 per unit of risk. If you would invest 1,506 in Franklin Gold Precious on September 12, 2024 and sell it today you would earn a total of 360.00 from holding Franklin Gold Precious or generate 23.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Franklin Gold Precious vs. Pear Tree Essex
Performance |
| Timeline |
| Franklin Gold Precious |
| Pear Tree Essex |
Franklin Gold and Pear Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Pear Tree
The main advantage of trading using opposite Franklin Gold and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree'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 |
| Pear Tree vs. Third Avenue Real | Pear Tree vs. Third Avenue Small Cap | Pear Tree vs. Smead Value Fund | Pear Tree vs. Baron Focused Growth |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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