Correlation Between Franklin Mutual and Great-west Goldman
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Great-west Goldman 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 Franklin Mutual and Great-west Goldman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual European and Great West Goldman Sachs, you can compare the effects of market volatilities on Franklin Mutual and Great-west Goldman 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 Franklin Mutual with a short position of Great-west Goldman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Great-west Goldman.
Diversification Opportunities for Franklin Mutual and Great-west Goldman
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Great-west is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual European and Great West Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Goldman and Franklin Mutual 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 Franklin Mutual European are associated (or correlated) with Great-west Goldman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Goldman has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Great-west Goldman go up and down completely randomly.
Pair Corralation between Franklin Mutual and Great-west Goldman
Assuming the 90 days horizon Franklin Mutual European is expected to under-perform the Great-west Goldman. In addition to that, Franklin Mutual is 1.05 times more volatile than Great West Goldman Sachs. It trades about -0.01 of its total potential returns per unit of risk. Great West Goldman Sachs is currently generating about 0.14 per unit of volatility. If you would invest 880.00 in Great West Goldman Sachs on September 1, 2024 and sell it today you would earn a total of 140.00 from holding Great West Goldman Sachs or generate 15.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Franklin Mutual European vs. Great West Goldman Sachs
Performance |
| Timeline |
| Franklin Mutual European |
| Great West Goldman |
Franklin Mutual and Great-west Goldman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Great-west Goldman
The main advantage of trading using opposite Franklin Mutual and Great-west Goldman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Great-west Goldman 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 Great-west Goldman will offset losses from the drop in Great-west Goldman's long position.| Franklin Mutual vs. Great West Goldman Sachs | Franklin Mutual vs. Precious Metals And | Franklin Mutual vs. Invesco Gold Special | Franklin Mutual vs. Goldman Sachs Clean |
| Great-west Goldman vs. Transamerica Funds | Great-west Goldman vs. Prudential Government Money | Great-west Goldman vs. Aim Investment Secs | Great-west Goldman vs. Dws Government Money |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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