Correlation Between Goldman Sachs and Franklin Adjustable
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Franklin Adjustable 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 Adjustable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Government and Franklin Adjustable Government, you can compare the effects of market volatilities on Goldman Sachs and Franklin Adjustable 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 Adjustable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Franklin Adjustable.
Diversification Opportunities for Goldman Sachs and Franklin Adjustable
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GOLDMAN and FRANKLIN is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Government and Franklin Adjustable Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Adjustable 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 Government are associated (or correlated) with Franklin Adjustable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Adjustable has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Franklin Adjustable go up and down completely randomly.
Pair Corralation between Goldman Sachs and Franklin Adjustable
Assuming the 90 days horizon Goldman Sachs is expected to generate 1.16 times less return on investment than Franklin Adjustable. In addition to that, Goldman Sachs is 3.1 times more volatile than Franklin Adjustable Government. It trades about 0.05 of its total potential returns per unit of risk. Franklin Adjustable Government is currently generating about 0.17 per unit of volatility. If you would invest 718.00 in Franklin Adjustable Government on September 2, 2024 and sell it today you would earn a total of 36.00 from holding Franklin Adjustable Government or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Government vs. Franklin Adjustable Government
Performance |
| Timeline |
| Goldman Sachs Government |
| Franklin Adjustable |
Goldman Sachs and Franklin Adjustable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Franklin Adjustable
The main advantage of trading using opposite Goldman Sachs and Franklin Adjustable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Franklin Adjustable 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 Adjustable will offset losses from the drop in Franklin Adjustable's long position.| Goldman Sachs vs. Oklahoma College Savings | Goldman Sachs vs. Ab Bond Inflation | Goldman Sachs vs. Guidepath Managed Futures | Goldman Sachs vs. Ab Bond Inflation |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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