Correlation Between Gmo Us and Franklin Government
Can any of the company-specific risk be diversified away by investing in both Gmo Us and Franklin Government 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 Gmo Us and Franklin Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Small Cap and Franklin Government Money, you can compare the effects of market volatilities on Gmo Us and Franklin Government 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 Gmo Us with a short position of Franklin Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Us and Franklin Government.
Diversification Opportunities for Gmo Us and Franklin Government
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gmo and Franklin is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Small Cap and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money and Gmo Us 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 Gmo Small Cap are associated (or correlated) with Franklin Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Gmo Us i.e., Gmo Us and Franklin Government go up and down completely randomly.
Pair Corralation between Gmo Us and Franklin Government
Assuming the 90 days horizon Gmo Small Cap is expected to generate 9.59 times more return on investment than Franklin Government. However, Gmo Us is 9.59 times more volatile than Franklin Government Money. It trades about 0.06 of its potential returns per unit of risk. Franklin Government Money is currently generating about 0.13 per unit of risk. If you would invest 1,596 in Gmo Small Cap on September 3, 2024 and sell it today you would earn a total of 700.00 from holding Gmo Small Cap or generate 43.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Small Cap vs. Franklin Government Money
Performance |
| Timeline |
| Gmo Small Cap |
| Franklin Government Money |
Gmo Us and Franklin Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Us and Franklin Government
The main advantage of trading using opposite Gmo Us and Franklin Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Us position performs unexpectedly, Franklin Government 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 Government will offset losses from the drop in Franklin Government's long position.| Gmo Us vs. Lind Capital Partners | Gmo Us vs. Ab Impact Municipal | Gmo Us vs. Angel Oak Financial | Gmo Us vs. Artisan High Income |
| Franklin Government vs. Vanguard Total Stock | Franklin Government vs. Vanguard 500 Index | Franklin Government vs. Vanguard Total Stock | Franklin Government vs. Vanguard Total Stock |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |