Correlation Between Gamco Natural and Franklin Ohio
Can any of the company-specific risk be diversified away by investing in both Gamco Natural and Franklin Ohio 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 Gamco Natural and Franklin Ohio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamco Natural Resources and Franklin Ohio Tax Free, you can compare the effects of market volatilities on Gamco Natural and Franklin Ohio 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 Gamco Natural with a short position of Franklin Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and Franklin Ohio.
Diversification Opportunities for Gamco Natural and Franklin Ohio
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gamco and Franklin is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and Franklin Ohio Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Ohio Tax and Gamco Natural 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 Gamco Natural Resources are associated (or correlated) with Franklin Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Ohio Tax has no effect on the direction of Gamco Natural i.e., Gamco Natural and Franklin Ohio go up and down completely randomly.
Pair Corralation between Gamco Natural and Franklin Ohio
Assuming the 90 days horizon Gamco Natural is expected to generate 2.6 times less return on investment than Franklin Ohio. In addition to that, Gamco Natural is 7.5 times more volatile than Franklin Ohio Tax Free. It trades about 0.02 of its total potential returns per unit of risk. Franklin Ohio Tax Free is currently generating about 0.43 per unit of volatility. If you would invest 1,167 in Franklin Ohio Tax Free on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Franklin Ohio Tax Free or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gamco Natural Resources vs. Franklin Ohio Tax Free
Performance |
| Timeline |
| Gamco Natural Resources |
| Franklin Ohio Tax |
Gamco Natural and Franklin Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Natural and Franklin Ohio
The main advantage of trading using opposite Gamco Natural and Franklin Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Natural position performs unexpectedly, Franklin Ohio 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 Ohio will offset losses from the drop in Franklin Ohio's long position.| Gamco Natural vs. Avantis Large Cap | Gamco Natural vs. American Mutual Fund | Gamco Natural vs. Jhancock Disciplined Value | Gamco Natural vs. Pace Large Value |
| Franklin Ohio vs. Fidelity Pennsylvania Municipal | Franklin Ohio vs. Fidelity Michigan Municipal | Franklin Ohio vs. Fidelity Arizona Municipal | Franklin Ohio vs. Fidelity Necticut Municipal |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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