Correlation Between Franklin Gold and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Floating Rate 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 Floating Rate 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 Floating Rate Fund, you can compare the effects of market volatilities on Franklin Gold and Floating Rate 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 Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Floating Rate.
Diversification Opportunities for Franklin Gold and Floating Rate
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Floating is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate 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 Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Franklin Gold i.e., Franklin Gold and Floating Rate go up and down completely randomly.
Pair Corralation between Franklin Gold and Floating Rate
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 11.19 times more return on investment than Floating Rate. However, Franklin Gold is 11.19 times more volatile than Floating Rate Fund. It trades about 0.29 of its potential returns per unit of risk. Floating Rate Fund is currently generating about 0.04 per unit of risk. If you would invest 1,650 in Franklin Gold Precious on November 27, 2024 and sell it today you would earn a total of 163.00 from holding Franklin Gold Precious or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Floating Rate Fund
Performance |
| Timeline |
| Franklin Gold Precious |
| Floating Rate |
Franklin Gold and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Floating Rate
The main advantage of trading using opposite Franklin Gold and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate's long position.| Franklin Gold vs. Gold And Precious | Franklin Gold vs. Wells Fargo Advantage | Franklin Gold vs. Investment Managers Series | Franklin Gold vs. Oppenheimer Gold Special |
| Floating Rate vs. Old Westbury Small | Floating Rate vs. Nt International Small Mid | Floating Rate vs. Glg Intl Small | Floating Rate vs. Artisan Small Cap |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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