Correlation Between James Balanced and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both James Balanced and Franklin Growth 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 James Balanced and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Balanced Golden and Franklin Growth Fund, you can compare the effects of market volatilities on James Balanced and Franklin Growth 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 James Balanced with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Franklin Growth.
Diversification Opportunities for James Balanced and Franklin Growth
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between James and Franklin is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Franklin Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth and James Balanced 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 James Balanced Golden are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth has no effect on the direction of James Balanced i.e., James Balanced and Franklin Growth go up and down completely randomly.
Pair Corralation between James Balanced and Franklin Growth
Assuming the 90 days horizon James Balanced Golden is expected to generate 0.44 times more return on investment than Franklin Growth. However, James Balanced Golden is 2.26 times less risky than Franklin Growth. It trades about -0.09 of its potential returns per unit of risk. Franklin Growth Fund is currently generating about -0.12 per unit of risk. If you would invest 2,321 in James Balanced Golden on October 29, 2024 and sell it today you would lose (53.00) from holding James Balanced Golden or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.44% |
| Values | Daily Returns |
James Balanced Golden vs. Franklin Growth Fund
Performance |
| Timeline |
| James Balanced Golden |
| Franklin Growth |
James Balanced and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and Franklin Growth
The main advantage of trading using opposite James Balanced and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.| James Balanced vs. Permanent Portfolio Class | James Balanced vs. Berwyn Income Fund | James Balanced vs. Large Cap Fund | James Balanced vs. Westcore Plus Bond |
| Franklin Growth vs. Fidelity Advisor Gold | Franklin Growth vs. James Balanced Golden | Franklin Growth vs. Global Gold Fund | Franklin Growth vs. Great West Goldman Sachs |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |