Correlation Between Short Precious and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Short Precious 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 Short Precious and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Precious Metals and Franklin Growth Fund, you can compare the effects of market volatilities on Short Precious 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 Short Precious with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Precious and Franklin Growth.
Diversification Opportunities for Short Precious and Franklin Growth
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Short and Franklin is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Short Precious Metals and Franklin Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth and Short Precious 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 Short Precious Metals 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 has no effect on the direction of Short Precious i.e., Short Precious and Franklin Growth go up and down completely randomly.
Pair Corralation between Short Precious and Franklin Growth
Assuming the 90 days horizon Short Precious Metals is expected to under-perform the Franklin Growth. In addition to that, Short Precious is 1.8 times more volatile than Franklin Growth Fund. It trades about -0.34 of its total potential returns per unit of risk. Franklin Growth Fund is currently generating about 0.26 per unit of volatility. If you would invest 13,419 in Franklin Growth Fund on October 29, 2024 and sell it today you would earn a total of 569.00 from holding Franklin Growth Fund or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Short Precious Metals vs. Franklin Growth Fund
Performance |
| Timeline |
| Short Precious Metals |
| Franklin Growth |
Short Precious and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Precious and Franklin Growth
The main advantage of trading using opposite Short Precious and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Precious 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.| Short Precious vs. Boyd Watterson Limited | Short Precious vs. Western Asset Adjustable | Short Precious vs. Small Midcap Dividend Income | Short Precious vs. Eip Growth And |
| Franklin Growth vs. Fidelity Advisor Gold | Franklin Growth vs. James Balanced Golden | Franklin Growth vs. Global Gold Fund | Franklin Growth vs. Great West Goldman Sachs |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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