Correlation Between Franklin Real and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Goldman Sachs 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 Real and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Real Estate and Goldman Sachs Small, you can compare the effects of market volatilities on Franklin Real and Goldman Sachs 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 Real with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Goldman Sachs.
Diversification Opportunities for Franklin Real and Goldman Sachs
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Goldman is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Goldman Sachs Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Small and Franklin Real 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 Real Estate are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Small has no effect on the direction of Franklin Real i.e., Franklin Real and Goldman Sachs go up and down completely randomly.
Pair Corralation between Franklin Real and Goldman Sachs
Assuming the 90 days horizon Franklin Real is expected to generate 1.66 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Franklin Real Estate is 1.24 times less risky than Goldman Sachs. It trades about 0.08 of its potential returns per unit of risk. Goldman Sachs Small is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,316 in Goldman Sachs Small on September 4, 2024 and sell it today you would earn a total of 1,072 from holding Goldman Sachs Small or generate 46.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Real Estate vs. Goldman Sachs Small
Performance |
| Timeline |
| Franklin Real Estate |
| Goldman Sachs Small |
Franklin Real and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Goldman Sachs
The main advantage of trading using opposite Franklin Real and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Franklin Real vs. Realty Income | Franklin Real vs. Dynex Capital | Franklin Real vs. First Industrial Realty | Franklin Real vs. Healthcare Realty Trust |
| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |