Correlation Between Franklin Gold and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Arrow Managed 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 Arrow Managed 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 Arrow Managed Futures, you can compare the effects of market volatilities on Franklin Gold and Arrow Managed 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 Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Arrow Managed.
Diversification Opportunities for Franklin Gold and Arrow Managed
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Arrow is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures 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 Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of Franklin Gold i.e., Franklin Gold and Arrow Managed go up and down completely randomly.
Pair Corralation between Franklin Gold and Arrow Managed
Assuming the 90 days horizon Franklin Gold Precious is expected to under-perform the Arrow Managed. In addition to that, Franklin Gold is 1.79 times more volatile than Arrow Managed Futures. It trades about -0.16 of its total potential returns per unit of risk. Arrow Managed Futures is currently generating about 0.33 per unit of volatility. If you would invest 536.00 in Arrow Managed Futures on September 5, 2024 and sell it today you would earn a total of 45.00 from holding Arrow Managed Futures or generate 8.4% 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. Arrow Managed Futures
Performance |
| Timeline |
| Franklin Gold Precious |
| Arrow Managed Futures |
Franklin Gold and Arrow Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Arrow Managed
The main advantage of trading using opposite Franklin Gold and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed'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 |
| Arrow Managed vs. Arrow Managed Futures | Arrow Managed vs. Arrow Managed Futures | Arrow Managed vs. Arrow Dwa Balanced | Arrow Managed vs. Arrow Dwa Balanced |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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