Correlation Between Goldman Sachs and Franklin California
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Franklin California 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 Goldman Sachs and Franklin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Clean and Franklin California Tax Free, you can compare the effects of market volatilities on Goldman Sachs and Franklin California 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 Goldman Sachs with a short position of Franklin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Franklin California.
Diversification Opportunities for Goldman Sachs and Franklin California
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goldman and Franklin is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and Franklin California Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California Tax and Goldman Sachs 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 Goldman Sachs Clean are associated (or correlated) with Franklin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California Tax has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Franklin California go up and down completely randomly.
Pair Corralation between Goldman Sachs and Franklin California
Assuming the 90 days horizon Goldman Sachs Clean is expected to under-perform the Franklin California. In addition to that, Goldman Sachs is 4.74 times more volatile than Franklin California Tax Free. It trades about -0.17 of its total potential returns per unit of risk. Franklin California Tax Free is currently generating about 0.15 per unit of volatility. If you would invest 687.00 in Franklin California Tax Free on September 4, 2024 and sell it today you would earn a total of 7.00 from holding Franklin California Tax Free or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Goldman Sachs Clean vs. Franklin California Tax Free
Performance |
| Timeline |
| Goldman Sachs Clean |
| Franklin California Tax |
Goldman Sachs and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Franklin California
The main advantage of trading using opposite Goldman Sachs and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Franklin California 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 California will offset losses from the drop in Franklin California's long position.The idea behind Goldman Sachs Clean and Franklin California Tax Free pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Franklin California vs. Limited Term Tax | Franklin California vs. Ab Select Longshort | Franklin California vs. Old Westbury Short Term | Franklin California vs. Quantitative Longshort Equity |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Transaction History View history of all your transactions and understand their impact on performance |