Correlation Between Franklin Gold and Glg Intl
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Glg Intl 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 Glg Intl 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 Glg Intl Small, you can compare the effects of market volatilities on Franklin Gold and Glg Intl 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 Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Glg Intl.
Diversification Opportunities for Franklin Gold and Glg Intl
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Glg is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Glg Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glg Intl Small 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 Glg Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glg Intl Small has no effect on the direction of Franklin Gold i.e., Franklin Gold and Glg Intl go up and down completely randomly.
Pair Corralation between Franklin Gold and Glg Intl
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 1.34 times more return on investment than Glg Intl. However, Franklin Gold is 1.34 times more volatile than Glg Intl Small. It trades about 0.5 of its potential returns per unit of risk. Glg Intl Small is currently generating about 0.29 per unit of risk. If you would invest 1,500 in Franklin Gold Precious on October 28, 2024 and sell it today you would earn a total of 178.00 from holding Franklin Gold Precious or generate 11.87% 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. Glg Intl Small
Performance |
| Timeline |
| Franklin Gold Precious |
| Glg Intl Small |
Franklin Gold and Glg Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Glg Intl
The main advantage of trading using opposite Franklin Gold and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Glg Intl 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 Glg Intl will offset losses from the drop in Glg Intl's long position.| Franklin Gold vs. Tiaa Cref Lifestyle Servative | Franklin Gold vs. Calvert Conservative Allocation | Franklin Gold vs. Franklin Servative Allocation | Franklin Gold vs. Tax Free Conservative Income |
| Glg Intl vs. Guggenheim Managed Futures | Glg Intl vs. Short Duration Inflation | Glg Intl vs. Ab Bond Inflation | Glg Intl vs. Tiaa Cref Inflation Link |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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