Correlation Between Great-west and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Great-west 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 Great-west and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Government Mortgage and Franklin Growth Opportunities, you can compare the effects of market volatilities on Great-west 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 Great-west with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great-west and Franklin Growth.
Diversification Opportunities for Great-west and Franklin Growth
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Great-west and Franklin is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Great West Government Mortgage 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 Great-west 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 Great West Government Mortgage 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 Great-west i.e., Great-west and Franklin Growth go up and down completely randomly.
Pair Corralation between Great-west and Franklin Growth
Assuming the 90 days horizon Great-west is expected to generate 6.32 times less return on investment than Franklin Growth. But when comparing it to its historical volatility, Great West Government Mortgage is 2.95 times less risky than Franklin Growth. It trades about 0.03 of its potential returns per unit of risk. Franklin Growth Opportunities is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,668 in Franklin Growth Opportunities on August 31, 2024 and sell it today you would earn a total of 1,676 from holding Franklin Growth Opportunities or generate 35.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Government Mortgage vs. Franklin Growth Opportunities
Performance |
| Timeline |
| Great West Government |
| Franklin Growth Oppo |
Great-west and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great-west and Franklin Growth
The main advantage of trading using opposite Great-west and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great-west 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.| Great-west vs. Aqr Sustainable Long Short | Great-west vs. Locorr Market Trend | Great-west vs. Calvert Developed Market | Great-west vs. Transamerica Emerging Markets |
| Franklin Growth vs. Gmo High Yield | Franklin Growth vs. Artisan High Income | Franklin Growth vs. Alpine High Yield | Franklin Growth vs. Pace High Yield |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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