Correlation Between Gamco Natural and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Gamco Natural and Franklin Mutual 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 Mutual 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 Mutual Global, you can compare the effects of market volatilities on Gamco Natural and Franklin Mutual 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 Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and Franklin Mutual.
Diversification Opportunities for Gamco Natural and Franklin Mutual
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gamco and Franklin is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and Franklin Mutual Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Global 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 Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Global has no effect on the direction of Gamco Natural i.e., Gamco Natural and Franklin Mutual go up and down completely randomly.
Pair Corralation between Gamco Natural and Franklin Mutual
Assuming the 90 days horizon Gamco Natural Resources is expected to under-perform the Franklin Mutual. In addition to that, Gamco Natural is 1.35 times more volatile than Franklin Mutual Global. It trades about -0.11 of its total potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.26 per unit of volatility. If you would invest 3,221 in Franklin Mutual Global on September 1, 2024 and sell it today you would earn a total of 102.00 from holding Franklin Mutual Global or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamco Natural Resources vs. Franklin Mutual Global
Performance |
| Timeline |
| Gamco Natural Resources |
| Franklin Mutual Global |
Gamco Natural and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Natural and Franklin Mutual
The main advantage of trading using opposite Gamco Natural and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Natural position performs unexpectedly, Franklin Mutual 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 Mutual will offset losses from the drop in Franklin Mutual's long position.| Gamco Natural vs. Vanguard Total Stock | Gamco Natural vs. Vanguard 500 Index | Gamco Natural vs. Vanguard Total Stock | Gamco Natural vs. Vanguard Total Stock |
| Franklin Mutual vs. Ivy Energy Fund | Franklin Mutual vs. Fidelity Advisor Energy | Franklin Mutual vs. Gamco Natural Resources | Franklin Mutual vs. Icon Natural Resources |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |