Correlation Between Franklin Gold and Global Real
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Global Real 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 Global Real 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 Global Real Estate, you can compare the effects of market volatilities on Franklin Gold and Global Real 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 Global Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Global Real.
Diversification Opportunities for Franklin Gold and Global Real
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Global is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Global Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Real Estate 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 Global Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Real Estate has no effect on the direction of Franklin Gold i.e., Franklin Gold and Global Real go up and down completely randomly.
Pair Corralation between Franklin Gold and Global Real
Assuming the 90 days horizon Franklin Gold Precious is expected to under-perform the Global Real. In addition to that, Franklin Gold is 2.33 times more volatile than Global Real Estate. It trades about -0.16 of its total potential returns per unit of risk. Global Real Estate is currently generating about 0.06 per unit of volatility. If you would invest 946.00 in Global Real Estate on September 5, 2024 and sell it today you would earn a total of 10.00 from holding Global Real Estate or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Global Real Estate
Performance |
| Timeline |
| Franklin Gold Precious |
| Global Real Estate |
Franklin Gold and Global Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Global Real
The main advantage of trading using opposite Franklin Gold and Global Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Global Real 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 Global Real will offset losses from the drop in Global Real's long position.| Franklin Gold vs. Aqr Large Cap | Franklin Gold vs. Americafirst Large Cap | Franklin Gold vs. Avantis Large Cap | Franklin Gold vs. Qs Large Cap |
| Global Real vs. California Bond Fund | Global Real vs. Versatile Bond Portfolio | Global Real vs. Ab Impact Municipal | Global Real vs. Blrc Sgy Mnp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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