Correlation Between Franklin Gold and Sierra E
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Sierra E 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 Sierra E 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 Sierra E Retirement, you can compare the effects of market volatilities on Franklin Gold and Sierra E 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 Sierra E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Sierra E.
Diversification Opportunities for Franklin Gold and Sierra E
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Sierra is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Sierra E Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra E Retirement 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 Sierra E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra E Retirement has no effect on the direction of Franklin Gold i.e., Franklin Gold and Sierra E go up and down completely randomly.
Pair Corralation between Franklin Gold and Sierra E
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 3.44 times more return on investment than Sierra E. However, Franklin Gold is 3.44 times more volatile than Sierra E Retirement. It trades about 0.54 of its potential returns per unit of risk. Sierra E Retirement is currently generating about 0.23 per unit of risk. If you would invest 1,584 in Franklin Gold Precious on November 9, 2024 and sell it today you would earn a total of 245.00 from holding Franklin Gold Precious or generate 15.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Sierra E Retirement
Performance |
| Timeline |
| Franklin Gold Precious |
| Sierra E Retirement |
Franklin Gold and Sierra E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Sierra E
The main advantage of trading using opposite Franklin Gold and Sierra E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Sierra E 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 Sierra E will offset losses from the drop in Sierra E's long position.| Franklin Gold vs. Goldman Sachs Clean | Franklin Gold vs. Gabelli Gold Fund | Franklin Gold vs. Precious Metals And | Franklin Gold vs. James Balanced Golden |
| Sierra E vs. Litman Gregory Masters | Sierra E vs. Transamerica High Yield | Sierra E vs. Catalyst Exceed Defined | Sierra E vs. Chartwell Short Duration |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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