Correlation Between Goldman Sachs and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Franklin Templeton 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 Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Real and Franklin Templeton Multi Asset, you can compare the effects of market volatilities on Goldman Sachs and Franklin Templeton 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 Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Franklin Templeton.
Diversification Opportunities for Goldman Sachs and Franklin Templeton
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Goldman and Franklin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Real and Franklin Templeton Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton 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 Real are associated (or correlated) with Franklin Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Franklin Templeton go up and down completely randomly.
Pair Corralation between Goldman Sachs and Franklin Templeton
Assuming the 90 days horizon Goldman Sachs Real is expected to generate 4.43 times more return on investment than Franklin Templeton. However, Goldman Sachs is 4.43 times more volatile than Franklin Templeton Multi Asset. It trades about 0.3 of its potential returns per unit of risk. Franklin Templeton Multi Asset is currently generating about 0.14 per unit of risk. If you would invest 1,297 in Goldman Sachs Real on September 3, 2024 and sell it today you would earn a total of 71.00 from holding Goldman Sachs Real or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Real vs. Franklin Templeton Multi Asset
Performance |
| Timeline |
| Goldman Sachs Real |
| Franklin Templeton |
Goldman Sachs and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Franklin Templeton
The main advantage of trading using opposite Goldman Sachs and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Franklin Templeton 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 Templeton will offset losses from the drop in Franklin Templeton's long position.| Goldman Sachs vs. Goldman Sachs High | Goldman Sachs vs. Ab High Income | Goldman Sachs vs. Morningstar Aggressive Growth | Goldman Sachs vs. Artisan High Income |
| Franklin Templeton vs. Deutsche Real Estate | Franklin Templeton vs. Goldman Sachs Real | Franklin Templeton vs. Columbia Real Estate | Franklin Templeton vs. Fidelity Real Estate |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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