Correlation Between General Money and Franklin Natural
Can any of the company-specific risk be diversified away by investing in both General Money and Franklin Natural 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 General Money and Franklin Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Money Market and Franklin Natural Resources, you can compare the effects of market volatilities on General Money and Franklin Natural 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 General Money with a short position of Franklin Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Money and Franklin Natural.
Diversification Opportunities for General Money and Franklin Natural
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between General and Franklin is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding General Money Market and Franklin Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Natural Res and General Money 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 General Money Market are associated (or correlated) with Franklin Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Natural Res has no effect on the direction of General Money i.e., General Money and Franklin Natural go up and down completely randomly.
Pair Corralation between General Money and Franklin Natural
If you would invest 100.00 in General Money Market on September 19, 2024 and sell it today you would earn a total of 0.00 from holding General Money Market or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Money Market vs. Franklin Natural Resources
Performance |
| Timeline |
| General Money Market |
| Franklin Natural Res |
General Money and Franklin Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Money and Franklin Natural
The main advantage of trading using opposite General Money and Franklin Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Money position performs unexpectedly, Franklin Natural 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 Natural will offset losses from the drop in Franklin Natural's long position.| General Money vs. Vanguard Total Stock | General Money vs. Vanguard 500 Index | General Money vs. Vanguard Total Stock | General Money vs. Vanguard Total Stock |
| Franklin Natural vs. Hsbc Treasury Money | Franklin Natural vs. Dws Government Money | Franklin Natural vs. Prudential Government Money | Franklin Natural vs. Ubs Money Series |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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