Correlation Between Franklin Gold and Payden Floating
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Payden Floating 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 Payden Floating 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 Payden Floating Rate, you can compare the effects of market volatilities on Franklin Gold and Payden Floating 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 Payden Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Payden Floating.
Diversification Opportunities for Franklin Gold and Payden Floating
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Payden is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Payden Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden 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 Payden Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Floating Rate has no effect on the direction of Franklin Gold i.e., Franklin Gold and Payden Floating go up and down completely randomly.
Pair Corralation between Franklin Gold and Payden Floating
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 21.1 times more return on investment than Payden Floating. However, Franklin Gold is 21.1 times more volatile than Payden Floating Rate. It trades about 0.05 of its potential returns per unit of risk. Payden Floating Rate is currently generating about 0.51 per unit of risk. If you would invest 1,483 in Franklin Gold Precious on August 31, 2024 and sell it today you would earn a total of 384.00 from holding Franklin Gold Precious or generate 25.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Franklin Gold Precious vs. Payden Floating Rate
Performance |
| Timeline |
| Franklin Gold Precious |
| Payden Floating Rate |
Franklin Gold and Payden Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Payden Floating
The main advantage of trading using opposite Franklin Gold and Payden Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Payden Floating 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 Payden Floating will offset losses from the drop in Payden Floating's long position.| Franklin Gold vs. First Eagle Gold | Franklin Gold vs. First Eagle Gold | Franklin Gold vs. Oppenheimer Gold Special | Franklin Gold vs. Gold Portfolio Gold |
| Payden Floating vs. Franklin Gold Precious | Payden Floating vs. Great West Goldman Sachs | Payden Floating vs. Gold And Precious | Payden Floating vs. Global Gold Fund |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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