Correlation Between Franklin Gold and John Hancock
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and John Hancock 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 John Hancock 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 John Hancock Investment, you can compare the effects of market volatilities on Franklin Gold and John Hancock 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 John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and John Hancock.
Diversification Opportunities for Franklin Gold and John Hancock
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and John is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and John Hancock Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Investment 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 John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Investment has no effect on the direction of Franklin Gold i.e., Franklin Gold and John Hancock go up and down completely randomly.
Pair Corralation between Franklin Gold and John Hancock
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 3.09 times more return on investment than John Hancock. However, Franklin Gold is 3.09 times more volatile than John Hancock Investment. It trades about 0.22 of its potential returns per unit of risk. John Hancock Investment is currently generating about 0.22 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 | 95.45% |
| Values | Daily Returns |
Franklin Gold Precious vs. John Hancock Investment
Performance |
| Timeline |
| Franklin Gold Precious |
| John Hancock Investment |
Franklin Gold and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and John Hancock
The main advantage of trading using opposite Franklin Gold and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock'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 |
| John Hancock vs. Redwood Real Estate | John Hancock vs. Columbia Real Estate | John Hancock vs. Guggenheim Risk Managed | John Hancock vs. Vy Clarion Real |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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