Correlation Between Franklin Gold and Mfs Alabama
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Mfs Alabama 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 Mfs Alabama 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 Mfs Alabama Municipal, you can compare the effects of market volatilities on Franklin Gold and Mfs Alabama 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 Mfs Alabama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Mfs Alabama.
Diversification Opportunities for Franklin Gold and Mfs Alabama
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Mfs is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Mfs Alabama Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Alabama Municipal 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 Mfs Alabama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Alabama Municipal has no effect on the direction of Franklin Gold i.e., Franklin Gold and Mfs Alabama go up and down completely randomly.
Pair Corralation between Franklin Gold and Mfs Alabama
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 11.59 times more return on investment than Mfs Alabama. However, Franklin Gold is 11.59 times more volatile than Mfs Alabama Municipal. It trades about 0.22 of its potential returns per unit of risk. Mfs Alabama Municipal is currently generating about 0.47 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 | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Mfs Alabama Municipal
Performance |
| Timeline |
| Franklin Gold Precious |
| Mfs Alabama Municipal |
Franklin Gold and Mfs Alabama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Mfs Alabama
The main advantage of trading using opposite Franklin Gold and Mfs Alabama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Mfs Alabama 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 Mfs Alabama will offset losses from the drop in Mfs Alabama'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 |
| Mfs Alabama vs. Guggenheim Risk Managed | Mfs Alabama vs. Commonwealth Real Estate | Mfs Alabama vs. Amg Managers Centersquare | Mfs Alabama vs. Redwood Real Estate |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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