Correlation Between Franklin Gold and Short Precious
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Short Precious 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 Short Precious 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 Short Precious Metals, you can compare the effects of market volatilities on Franklin Gold and Short Precious 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 Short Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Short Precious.
Diversification Opportunities for Franklin Gold and Short Precious
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Short is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Short Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Precious Metals 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 Short Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Precious Metals has no effect on the direction of Franklin Gold i.e., Franklin Gold and Short Precious go up and down completely randomly.
Pair Corralation between Franklin Gold and Short Precious
Assuming the 90 days horizon Franklin Gold Precious is expected to under-perform the Short Precious. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Gold Precious is 1.11 times less risky than Short Precious. The mutual fund trades about -0.29 of its potential returns per unit of risk. The Short Precious Metals is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 893.00 in Short Precious Metals on August 29, 2024 and sell it today you would earn a total of 88.00 from holding Short Precious Metals or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Short Precious Metals
Performance |
| Timeline |
| Franklin Gold Precious |
| Short Precious Metals |
Franklin Gold and Short Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Short Precious
The main advantage of trading using opposite Franklin Gold and Short Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Short Precious 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 Short Precious will offset losses from the drop in Short Precious' long position.| Franklin Gold vs. First Eagle Gold | Franklin Gold vs. First Eagle Gold | Franklin Gold vs. Oppenheimer Gold Special | Franklin Gold vs. Aquagold International |
| Short Precious vs. International Investors Gold | Short Precious vs. First Eagle Gold | Short Precious vs. Gamco Global Gold | Short Precious vs. Fidelity Advisor Gold |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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