Correlation Between Tax Exempt and Franklin Gold
Can any of the company-specific risk be diversified away by investing in both Tax Exempt 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 Tax Exempt and Franklin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tax Exempt High Yield and Franklin Gold Precious, you can compare the effects of market volatilities on Tax Exempt 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 Tax Exempt with a short position of Franklin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tax Exempt and Franklin Gold.
Diversification Opportunities for Tax Exempt and Franklin Gold
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tax and Franklin is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Tax Exempt High Yield 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 Tax Exempt 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 Tax Exempt High Yield 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 Tax Exempt i.e., Tax Exempt and Franklin Gold go up and down completely randomly.
Pair Corralation between Tax Exempt and Franklin Gold
Assuming the 90 days horizon Tax Exempt is expected to generate 2.22 times less return on investment than Franklin Gold. But when comparing it to its historical volatility, Tax Exempt High Yield is 5.9 times less risky than Franklin Gold. It trades about 0.09 of its potential returns per unit of risk. Franklin Gold Precious is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,462 in Franklin Gold Precious on September 16, 2024 and sell it today you would earn a total of 369.00 from holding Franklin Gold Precious or generate 25.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tax Exempt High Yield vs. Franklin Gold Precious
Performance |
| Timeline |
| Tax Exempt High |
| Franklin Gold Precious |
Tax Exempt and Franklin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tax Exempt and Franklin Gold
The main advantage of trading using opposite Tax Exempt and Franklin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tax Exempt 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.| Tax Exempt vs. Franklin Gold Precious | Tax Exempt vs. Goldman Sachs Clean | Tax Exempt vs. Global Gold Fund | Tax Exempt vs. Gabelli Gold Fund |
| Franklin Gold vs. Franklin Mutual Beacon | Franklin Gold vs. Templeton Developing Markets | Franklin Gold vs. Franklin Mutual Global | Franklin Gold vs. Franklin Mutual Global |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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