Correlation Between Franklin Gold and Valic Company
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Valic Company 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 Valic Company 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 Valic Company I, you can compare the effects of market volatilities on Franklin Gold and Valic Company 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 Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Valic Company.
Diversification Opportunities for Franklin Gold and Valic Company
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Valic is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I 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 Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Franklin Gold i.e., Franklin Gold and Valic Company go up and down completely randomly.
Pair Corralation between Franklin Gold and Valic Company
Assuming the 90 days horizon Franklin Gold Precious is expected to under-perform the Valic Company. In addition to that, Franklin Gold is 2.13 times more volatile than Valic Company I. It trades about -0.18 of its total potential returns per unit of risk. Valic Company I is currently generating about 0.3 per unit of volatility. If you would invest 1,999 in Valic Company I on September 2, 2024 and sell it today you would earn a total of 122.00 from holding Valic Company I or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Valic Company I
Performance |
| Timeline |
| Franklin Gold Precious |
| Valic Company I |
Franklin Gold and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Valic Company
The main advantage of trading using opposite Franklin Gold and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company's long position.| Franklin Gold vs. Franklin Mutual Beacon | Franklin Gold vs. Templeton Developing Markets | Franklin Gold vs. Franklin Mutual Global | Franklin Gold vs. Franklin Mutual Global |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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