Correlation Between Franklin Gold and Tiaa-cref Small-cap
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Tiaa-cref Small-cap 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 Tiaa-cref Small-cap 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 Tiaa Cref Small Cap Blend, you can compare the effects of market volatilities on Franklin Gold and Tiaa-cref Small-cap 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 Tiaa-cref Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Tiaa-cref Small-cap.
Diversification Opportunities for Franklin Gold and Tiaa-cref Small-cap
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Tiaa-cref is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Tiaa Cref Small Cap Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa-cref Small-cap 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 Tiaa-cref Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa-cref Small-cap has no effect on the direction of Franklin Gold i.e., Franklin Gold and Tiaa-cref Small-cap go up and down completely randomly.
Pair Corralation between Franklin Gold and Tiaa-cref Small-cap
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 1.29 times more return on investment than Tiaa-cref Small-cap. However, Franklin Gold is 1.29 times more volatile than Tiaa Cref Small Cap Blend. It trades about 0.08 of its potential returns per unit of risk. Tiaa Cref Small Cap Blend is currently generating about 0.09 per unit of risk. If you would invest 1,366 in Franklin Gold Precious on September 4, 2024 and sell it today you would earn a total of 471.00 from holding Franklin Gold Precious or generate 34.48% 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. Tiaa Cref Small Cap Blend
Performance |
| Timeline |
| Franklin Gold Precious |
| Tiaa-cref Small-cap |
Franklin Gold and Tiaa-cref Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Tiaa-cref Small-cap
The main advantage of trading using opposite Franklin Gold and Tiaa-cref Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Tiaa-cref Small-cap 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 Tiaa-cref Small-cap will offset losses from the drop in Tiaa-cref Small-cap's long position.| Franklin Gold vs. Northern Small Cap | Franklin Gold vs. Wasatch Small Cap | Franklin Gold vs. Harbor Diversified International | Franklin Gold vs. T Rowe Price |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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