Correlation Between Great West and Franklin Gold
Can any of the company-specific risk be diversified away by investing in both Great West and Franklin Gold 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 Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Goldman Sachs and Franklin Gold Precious, you can compare the effects of market volatilities on Great West and Franklin Gold 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 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Franklin Gold.
Diversification Opportunities for Great West and Franklin Gold
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Great and Franklin is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Great West Goldman Sachs and Franklin Gold Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Gold Precious 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 Goldman Sachs are associated (or correlated) with Franklin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Gold Precious has no effect on the direction of Great West i.e., Great West and Franklin Gold go up and down completely randomly.
Pair Corralation between Great West and Franklin Gold
Assuming the 90 days horizon Great West Goldman Sachs is expected to generate 1.47 times more return on investment than Franklin Gold. However, Great West is 1.47 times more volatile than Franklin Gold Precious. It trades about 0.03 of its potential returns per unit of risk. Franklin Gold Precious is currently generating about -0.02 per unit of risk. If you would invest 841.00 in Great West Goldman Sachs on November 1, 2024 and sell it today you would earn a total of 20.00 from holding Great West Goldman Sachs or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Great West Goldman Sachs vs. Franklin Gold Precious
Performance |
| Timeline |
| Great West Goldman |
| Franklin Gold Precious |
Great West and Franklin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Franklin Gold
The main advantage of trading using opposite Great West and Franklin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, Franklin Gold 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 Gold will offset losses from the drop in Franklin Gold's long position.| Great West vs. Doubleline Core Fixed | Great West vs. Calvert International Equity | Great West vs. Enhanced Fixed Income | Great West vs. Ab Servative Wealth |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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