Correlation Between Northern Small and Franklin Gold
Can any of the company-specific risk be diversified away by investing in both Northern Small 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 Northern Small and Franklin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Small Cap and Franklin Gold Precious, you can compare the effects of market volatilities on Northern Small 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 Northern Small with a short position of Franklin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Small and Franklin Gold.
Diversification Opportunities for Northern Small and Franklin Gold
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Northern and Franklin is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Northern Small Cap 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 Northern Small 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 Northern Small Cap 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 Northern Small i.e., Northern Small and Franklin Gold go up and down completely randomly.
Pair Corralation between Northern Small and Franklin Gold
Assuming the 90 days horizon Northern Small Cap is expected to under-perform the Franklin Gold. But the mutual fund apears to be less risky and, when comparing its historical volatility, Northern Small Cap is 1.64 times less risky than Franklin Gold. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Franklin Gold Precious is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,844 in Franklin Gold Precious on September 12, 2024 and sell it today you would earn a total of 22.00 from holding Franklin Gold Precious or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Small Cap vs. Franklin Gold Precious
Performance |
| Timeline |
| Northern Small Cap |
| Franklin Gold Precious |
Northern Small and Franklin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Small and Franklin Gold
The main advantage of trading using opposite Northern Small and Franklin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Small 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.| Northern Small vs. Aam Select Income | Northern Small vs. Rbc Microcap Value | Northern Small vs. Rbb Fund | Northern Small vs. Acm Dynamic Opportunity |
| Franklin Gold vs. Columbia Global Technology | Franklin Gold vs. Towpath Technology | Franklin Gold vs. Red Oak Technology | Franklin Gold vs. Goldman Sachs Technology |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |