Correlation Between Goldman Sachs and Franklin High
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Franklin High 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 High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs High and Franklin High Income, you can compare the effects of market volatilities on Goldman Sachs and Franklin High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Franklin High.
Diversification Opportunities for Goldman Sachs and Franklin High
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Goldman and Franklin is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs High and Franklin High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Income 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 High are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Income has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Franklin High go up and down completely randomly.
Pair Corralation between Goldman Sachs and Franklin High
Assuming the 90 days horizon Goldman Sachs is expected to generate 1.55 times less return on investment than Franklin High. But when comparing it to its historical volatility, Goldman Sachs High is 1.11 times less risky than Franklin High. It trades about 0.07 of its potential returns per unit of risk. Franklin High Income is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 149.00 in Franklin High Income on September 1, 2024 and sell it today you would earn a total of 26.00 from holding Franklin High Income or generate 17.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs High vs. Franklin High Income
Performance |
| Timeline |
| Goldman Sachs High |
| Franklin High Income |
Goldman Sachs and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Franklin High
The main advantage of trading using opposite Goldman Sachs and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Franklin High 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 High will offset losses from the drop in Franklin High's long position.| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
| Franklin High vs. Franklin Mutual Beacon | Franklin High vs. Templeton Developing Markets | Franklin High vs. Franklin Mutual Global | Franklin High vs. Franklin Mutual Global |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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