Correlation Between Glg Intl and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Glg Intl 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 Glg Intl and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glg Intl Small and Franklin Growth Opportunities, you can compare the effects of market volatilities on Glg Intl 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 Glg Intl with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glg Intl and Franklin Growth.
Diversification Opportunities for Glg Intl and Franklin Growth
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Glg and Franklin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and Franklin Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Oppo and Glg Intl 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 Glg Intl Small 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 Oppo has no effect on the direction of Glg Intl i.e., Glg Intl and Franklin Growth go up and down completely randomly.
Pair Corralation between Glg Intl and Franklin Growth
Assuming the 90 days horizon Glg Intl Small is expected to generate 0.8 times more return on investment than Franklin Growth. However, Glg Intl Small is 1.25 times less risky than Franklin Growth. It trades about 0.05 of its potential returns per unit of risk. Franklin Growth Opportunities is currently generating about -0.01 per unit of risk. If you would invest 8,485 in Glg Intl Small on October 22, 2024 and sell it today you would earn a total of 68.00 from holding Glg Intl Small or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glg Intl Small vs. Franklin Growth Opportunities
Performance |
| Timeline |
| Glg Intl Small |
| Franklin Growth Oppo |
Glg Intl and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glg Intl and Franklin Growth
The main advantage of trading using opposite Glg Intl and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glg Intl 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.| Glg Intl vs. Altegris Futures Evolution | Glg Intl vs. Ab Bond Inflation | Glg Intl vs. Lord Abbett Inflation | Glg Intl vs. Ab Bond Inflation |
| Franklin Growth vs. Needham Aggressive Growth | Franklin Growth vs. Franklin Small Cap | Franklin Growth vs. Ab Small Cap | Franklin Growth vs. Glg Intl Small |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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