Correlation Between Stone Ridge and Franklin Gold
Can any of the company-specific risk be diversified away by investing in both Stone Ridge 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 Stone Ridge and Franklin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stone Ridge Diversified and Franklin Gold Precious, you can compare the effects of market volatilities on Stone Ridge 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 Stone Ridge with a short position of Franklin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Franklin Gold.
Diversification Opportunities for Stone Ridge and Franklin Gold
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stone and Franklin is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified 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 Stone Ridge 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 Stone Ridge Diversified 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 Stone Ridge i.e., Stone Ridge and Franklin Gold go up and down completely randomly.
Pair Corralation between Stone Ridge and Franklin Gold
Assuming the 90 days horizon Stone Ridge Diversified is expected to under-perform the Franklin Gold. But the mutual fund apears to be less risky and, when comparing its historical volatility, Stone Ridge Diversified is 6.59 times less risky than Franklin Gold. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Franklin Gold Precious is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 1,540 in Franklin Gold Precious on November 3, 2024 and sell it today you would earn a total of 171.00 from holding Franklin Gold Precious or generate 11.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stone Ridge Diversified vs. Franklin Gold Precious
Performance |
| Timeline |
| Stone Ridge Diversified |
| Franklin Gold Precious |
Stone Ridge and Franklin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Franklin Gold
The main advantage of trading using opposite Stone Ridge and Franklin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge 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.| Stone Ridge vs. Artisan High Income | Stone Ridge vs. Multisector Bond Sma | Stone Ridge vs. Angel Oak Financial | Stone Ridge vs. Ab Bond Inflation |
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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 Stocks Directory module to find actively traded stocks across global markets.
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