Correlation Between Us Global and Franklin
Can any of the company-specific risk be diversified away by investing in both Us Global and Franklin 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 Us Global and Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Global Investors and Franklin Government Money, you can compare the effects of market volatilities on Us Global and Franklin 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 Us Global with a short position of Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Global and Franklin.
Diversification Opportunities for Us Global and Franklin
Good diversification
The 3 months correlation between USLUX and Franklin is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Us Global Investors and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money and Us Global 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 Us Global Investors are associated (or correlated) with Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Us Global i.e., Us Global and Franklin go up and down completely randomly.
Pair Corralation between Us Global and Franklin
Assuming the 90 days horizon Us Global Investors is expected to generate 0.3 times more return on investment than Franklin. However, Us Global Investors is 3.37 times less risky than Franklin. It trades about 0.03 of its potential returns per unit of risk. Franklin Government Money is currently generating about -0.04 per unit of risk. If you would invest 1,850 in Us Global Investors on October 29, 2024 and sell it today you would earn a total of 273.00 from holding Us Global Investors or generate 14.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Us Global Investors vs. Franklin Government Money
Performance |
| Timeline |
| Us Global Investors |
| Franklin Government Money |
Us Global and Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Global and Franklin
The main advantage of trading using opposite Us Global and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Global position performs unexpectedly, Franklin 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 will offset losses from the drop in Franklin's long position.| Us Global vs. Alphacentric Hedged Market | Us Global vs. Calvert Developed Market | Us Global vs. Sp Midcap Index | Us Global vs. Barings Emerging Markets |
| Franklin vs. Delaware Limited Term Diversified | Franklin vs. Inverse Emerging Markets | Franklin vs. Prudential Emerging Markets | Franklin vs. Alphacentric Hedged Market |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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