Correlation Between Franklin Gold and Transamerica Capital
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Transamerica Capital 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 Transamerica Capital 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 Transamerica Capital Growth, you can compare the effects of market volatilities on Franklin Gold and Transamerica Capital 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 Transamerica Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Transamerica Capital.
Diversification Opportunities for Franklin Gold and Transamerica Capital
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Transamerica is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Transamerica Capital Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Capital 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 Transamerica Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Capital has no effect on the direction of Franklin Gold i.e., Franklin Gold and Transamerica Capital go up and down completely randomly.
Pair Corralation between Franklin Gold and Transamerica Capital
Assuming the 90 days horizon Franklin Gold is expected to generate 1.85 times less return on investment than Transamerica Capital. But when comparing it to its historical volatility, Franklin Gold Precious is 1.06 times less risky than Transamerica Capital. It trades about 0.05 of its potential returns per unit of risk. Transamerica Capital Growth is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,980 in Transamerica Capital Growth on November 7, 2024 and sell it today you would earn a total of 2,021 from holding Transamerica Capital Growth or generate 102.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Franklin Gold Precious vs. Transamerica Capital Growth
Performance |
| Timeline |
| Franklin Gold Precious |
| Transamerica Capital |
Franklin Gold and Transamerica Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Transamerica Capital
The main advantage of trading using opposite Franklin Gold and Transamerica Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Transamerica Capital 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 Transamerica Capital will offset losses from the drop in Transamerica Capital's long position.| Franklin Gold vs. Eagle Mlp Strategy | Franklin Gold vs. Western Assets Emerging | Franklin Gold vs. The Hartford Emerging | Franklin Gold vs. Mid Cap 15x Strategy |
| Transamerica Capital vs. Ab Bond Inflation | Transamerica Capital vs. California Municipal Portfolio | Transamerica Capital vs. Bbh Intermediate Municipal | Transamerica Capital vs. Pace Municipal Fixed |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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