Correlation Between Franklin Gold and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Growth Strategy 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 Growth Strategy 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 Growth Strategy Fund, you can compare the effects of market volatilities on Franklin Gold and Growth Strategy 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 Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Growth Strategy.
Diversification Opportunities for Franklin Gold and Growth Strategy
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Growth is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy 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 Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of Franklin Gold i.e., Franklin Gold and Growth Strategy go up and down completely randomly.
Pair Corralation between Franklin Gold and Growth Strategy
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 2.53 times more return on investment than Growth Strategy. However, Franklin Gold is 2.53 times more volatile than Growth Strategy Fund. It trades about 0.04 of its potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.08 per unit of risk. If you would invest 1,444 in Franklin Gold Precious on September 3, 2024 and sell it today you would earn a total of 423.00 from holding Franklin Gold Precious or generate 29.29% 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. Growth Strategy Fund
Performance |
| Timeline |
| Franklin Gold Precious |
| Growth Strategy |
Franklin Gold and Growth Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Growth Strategy
The main advantage of trading using opposite Franklin Gold and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Growth Strategy 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 Growth Strategy will offset losses from the drop in Growth Strategy's long position.| Franklin Gold vs. Rationalpier 88 Convertible | Franklin Gold vs. Gabelli Convertible And | Franklin Gold vs. Calamos Dynamic Convertible | Franklin Gold vs. Absolute Convertible Arbitrage |
| Growth Strategy vs. Franklin Gold Precious | Growth Strategy vs. Europac Gold Fund | Growth Strategy vs. Global Gold Fund | Growth Strategy vs. Vy Goldman Sachs |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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