Correlation Between Goldman Sachs and Franklin Gold
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Franklin Gold 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 Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Small and Franklin Gold Precious, you can compare the effects of market volatilities on Goldman Sachs and Franklin Gold 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 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Franklin Gold.
Diversification Opportunities for Goldman Sachs and Franklin Gold
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goldman and Franklin is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Small and Franklin Gold Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Gold Precious 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 Small are associated (or correlated) with Franklin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Gold Precious has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Franklin Gold go up and down completely randomly.
Pair Corralation between Goldman Sachs and Franklin Gold
Assuming the 90 days horizon Goldman Sachs Small is expected to generate 0.89 times more return on investment than Franklin Gold. However, Goldman Sachs Small is 1.13 times less risky than Franklin Gold. It trades about 0.26 of its potential returns per unit of risk. Franklin Gold Precious is currently generating about -0.16 per unit of risk. If you would invest 3,070 in Goldman Sachs Small on September 3, 2024 and sell it today you would earn a total of 303.00 from holding Goldman Sachs Small or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Small vs. Franklin Gold Precious
Performance |
| Timeline |
| Goldman Sachs Small |
| Franklin Gold Precious |
Goldman Sachs and Franklin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Franklin Gold
The main advantage of trading using opposite Goldman Sachs and Franklin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Franklin Gold 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 Gold will offset losses from the drop in Franklin Gold's long position.| Goldman Sachs vs. Franklin Real Estate | Goldman Sachs vs. Us Real Estate | Goldman Sachs vs. Amg Managers Centersquare | Goldman Sachs vs. Columbia Real Estate |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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