Correlation Between Franklin Gold and Profunds Ultrashort
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Profunds Ultrashort 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 Profunds Ultrashort 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 Profunds Ultrashort Nasdaq 100, you can compare the effects of market volatilities on Franklin Gold and Profunds Ultrashort 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 Profunds Ultrashort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Profunds Ultrashort.
Diversification Opportunities for Franklin Gold and Profunds Ultrashort
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Profunds is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Profunds Ultrashort Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profunds Ultrashort 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 Profunds Ultrashort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profunds Ultrashort has no effect on the direction of Franklin Gold i.e., Franklin Gold and Profunds Ultrashort go up and down completely randomly.
Pair Corralation between Franklin Gold and Profunds Ultrashort
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 1.02 times more return on investment than Profunds Ultrashort. However, Franklin Gold is 1.02 times more volatile than Profunds Ultrashort Nasdaq 100. It trades about -0.2 of its potential returns per unit of risk. Profunds Ultrashort Nasdaq 100 is currently generating about -0.23 per unit of risk. If you would invest 2,040 in Franklin Gold Precious on September 1, 2024 and sell it today you would lose (173.00) from holding Franklin Gold Precious or give up 8.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Profunds Ultrashort Nasdaq 100
Performance |
| Timeline |
| Franklin Gold Precious |
| Profunds Ultrashort |
Franklin Gold and Profunds Ultrashort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Profunds Ultrashort
The main advantage of trading using opposite Franklin Gold and Profunds Ultrashort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Profunds Ultrashort 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 Profunds Ultrashort will offset losses from the drop in Profunds Ultrashort's long position.| Franklin Gold vs. Franklin Emerging Market | Franklin Gold vs. Transamerica Emerging Markets | Franklin Gold vs. Eagle Mlp Strategy | Franklin Gold vs. Goldman Sachs Emerging |
| Profunds Ultrashort vs. James Balanced Golden | Profunds Ultrashort vs. Franklin Gold Precious | Profunds Ultrashort vs. Gamco Global Gold | Profunds Ultrashort vs. Gabelli Gold Fund |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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