Correlation Between Franklin Gold and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Mainstay Moderate 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 Mainstay Moderate 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 Mainstay Moderate Allocation, you can compare the effects of market volatilities on Franklin Gold and Mainstay Moderate 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 Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Mainstay Moderate.
Diversification Opportunities for Franklin Gold and Mainstay Moderate
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Mainstay is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Mainstay Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate 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 Mainstay Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate has no effect on the direction of Franklin Gold i.e., Franklin Gold and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Franklin Gold and Mainstay Moderate
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 3.54 times more return on investment than Mainstay Moderate. However, Franklin Gold is 3.54 times more volatile than Mainstay Moderate Allocation. It trades about 0.06 of its potential returns per unit of risk. Mainstay Moderate Allocation is currently generating about 0.13 per unit of risk. If you would invest 1,668 in Franklin Gold Precious on September 2, 2024 and sell it today you would earn a total of 199.00 from holding Franklin Gold Precious or generate 11.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Mainstay Moderate Allocation
Performance |
| Timeline |
| Franklin Gold Precious |
| Mainstay Moderate |
Franklin Gold and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Mainstay Moderate
The main advantage of trading using opposite Franklin Gold and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Mainstay Moderate 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 Mainstay Moderate will offset losses from the drop in Mainstay Moderate'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 |
| Mainstay Moderate vs. Mainstay High Yield | Mainstay Moderate vs. Mainstay Tax Free | Mainstay Moderate vs. Mainstay Income Builder | Mainstay Moderate vs. Mainstay Large 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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