Correlation Between NYSE Composite and Franklin Gold
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Franklin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Franklin Gold Precious, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Franklin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Franklin Gold.
Diversification Opportunities for NYSE Composite and Franklin Gold
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Franklin is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Franklin Gold go up and down completely randomly.
Pair Corralation between NYSE Composite and Franklin Gold
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.02 times less return on investment than Franklin Gold. But when comparing it to its historical volatility, NYSE Composite is 2.46 times less risky than Franklin Gold. It trades about 0.11 of its potential returns per unit of risk. Franklin Gold Precious is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,483 in Franklin Gold Precious on August 31, 2024 and sell it today you would earn a total of 384.00 from holding Franklin Gold Precious or generate 25.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Franklin Gold Precious
Performance |
| Timeline |
NYSE Composite and Franklin Gold Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Franklin Gold Precious
Pair trading matchups for Franklin Gold
Pair Trading with NYSE Composite and Franklin Gold
The main advantage of trading using opposite NYSE Composite and Franklin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Franklin Gold vs. First Eagle Gold | Franklin Gold vs. First Eagle Gold | Franklin Gold vs. Oppenheimer Gold Special | Franklin Gold vs. Gold Portfolio Gold |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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