Correlation Between Gold And and Franklin Gold
Can any of the company-specific risk be diversified away by investing in both Gold And 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 Gold And and Franklin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold And Precious and Franklin Gold Precious, you can compare the effects of market volatilities on Gold And 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 Gold And with a short position of Franklin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold And and Franklin Gold.
Diversification Opportunities for Gold And and Franklin Gold
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Gold and Franklin is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Gold And Precious 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 Gold And 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 Gold And Precious 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 Gold And i.e., Gold And and Franklin Gold go up and down completely randomly.
Pair Corralation between Gold And and Franklin Gold
Assuming the 90 days horizon Gold And Precious is expected to under-perform the Franklin Gold. In addition to that, Gold And is 1.04 times more volatile than Franklin Gold Precious. It trades about -0.29 of its total potential returns per unit of risk. Franklin Gold Precious is currently generating about -0.22 per unit of volatility. If you would invest 2,387 in Franklin Gold Precious on August 28, 2024 and sell it today you would lose (219.00) from holding Franklin Gold Precious or give up 9.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold And Precious vs. Franklin Gold Precious
Performance |
| Timeline |
| Gold And Precious |
| Franklin Gold Precious |
Gold And and Franklin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold And and Franklin Gold
The main advantage of trading using opposite Gold And and Franklin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold And 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.| Gold And vs. Columbia Global Technology | Gold And vs. Firsthand Technology Opportunities | Gold And vs. Global Technology Portfolio | Gold And vs. Icon Information Technology |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |