Correlation Between Franklin Gold and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Franklin Mutual 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 Franklin Mutual 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 Franklin Mutual Beacon, you can compare the effects of market volatilities on Franklin Gold and Franklin Mutual 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 Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Franklin Mutual.
Diversification Opportunities for Franklin Gold and Franklin Mutual
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Franklin is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Franklin Mutual Beacon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Beacon 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 Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Beacon has no effect on the direction of Franklin Gold i.e., Franklin Gold and Franklin Mutual go up and down completely randomly.
Pair Corralation between Franklin Gold and Franklin Mutual
Assuming the 90 days horizon Franklin Gold Precious is expected to under-perform the Franklin Mutual. In addition to that, Franklin Gold is 3.07 times more volatile than Franklin Mutual Beacon. It trades about -0.01 of its total potential returns per unit of risk. Franklin Mutual Beacon is currently generating about 0.03 per unit of volatility. If you would invest 1,718 in Franklin Mutual Beacon on August 29, 2024 and sell it today you would earn a total of 18.00 from holding Franklin Mutual Beacon or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Franklin Mutual Beacon
Performance |
| Timeline |
| Franklin Gold Precious |
| Franklin Mutual Beacon |
Franklin Gold and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Franklin Mutual
The main advantage of trading using opposite Franklin Gold and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Franklin Mutual 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 Franklin Mutual will offset losses from the drop in Franklin Mutual's 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 |
| Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Dodge Global Stock | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Global |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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