Correlation Between Franklin Gold and Jpmorgan Preferred
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Jpmorgan Preferred 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 Jpmorgan Preferred 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 Jpmorgan Preferred And, you can compare the effects of market volatilities on Franklin Gold and Jpmorgan Preferred 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 Jpmorgan Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Jpmorgan Preferred.
Diversification Opportunities for Franklin Gold and Jpmorgan Preferred
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Jpmorgan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Jpmorgan Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Preferred And 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 Jpmorgan Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Preferred And has no effect on the direction of Franklin Gold i.e., Franklin Gold and Jpmorgan Preferred go up and down completely randomly.
Pair Corralation between Franklin Gold and Jpmorgan Preferred
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 10.07 times more return on investment than Jpmorgan Preferred. However, Franklin Gold is 10.07 times more volatile than Jpmorgan Preferred And. It trades about 0.1 of its potential returns per unit of risk. Jpmorgan Preferred And is currently generating about 0.24 per unit of risk. If you would invest 1,365 in Franklin Gold Precious on September 1, 2024 and sell it today you would earn a total of 502.00 from holding Franklin Gold Precious or generate 36.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Franklin Gold Precious vs. Jpmorgan Preferred And
Performance |
| Timeline |
| Franklin Gold Precious |
| Jpmorgan Preferred And |
Franklin Gold and Jpmorgan Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Jpmorgan Preferred
The main advantage of trading using opposite Franklin Gold and Jpmorgan Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Jpmorgan Preferred 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 Jpmorgan Preferred will offset losses from the drop in Jpmorgan Preferred's long position.| Franklin Gold vs. Franklin Emerging Market | Franklin Gold vs. Transamerica Emerging Markets | Franklin Gold vs. Eagle Mlp Strategy | Franklin Gold vs. Goldman Sachs Emerging |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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