Correlation Between Franklin Gold and Mfs International
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Mfs International 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 Gold and Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Gold Precious and Mfs International Large, you can compare the effects of market volatilities on Franklin Gold and Mfs International 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 Gold with a short position of Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Mfs International.
Diversification Opportunities for Franklin Gold and Mfs International
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Mfs is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Mfs International Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Large and Franklin Gold 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 Gold Precious are associated (or correlated) with Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Large has no effect on the direction of Franklin Gold i.e., Franklin Gold and Mfs International go up and down completely randomly.
Pair Corralation between Franklin Gold and Mfs International
Assuming the 90 days horizon Franklin Gold Precious is expected to under-perform the Mfs International. In addition to that, Franklin Gold is 1.95 times more volatile than Mfs International Large. It trades about -0.18 of its total potential returns per unit of risk. Mfs International Large is currently generating about -0.19 per unit of volatility. If you would invest 1,502 in Mfs International Large on September 24, 2024 and sell it today you would lose (205.00) from holding Mfs International Large or give up 13.65% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Gold Precious vs. Mfs International Large
Performance |
Timeline |
Franklin Gold Precious |
Mfs International Large |
Franklin Gold and Mfs International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Gold and Mfs International
The main advantage of trading using opposite Franklin Gold and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Mfs International 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 Mfs International will offset losses from the drop in Mfs International's long position.Franklin Gold vs. Morningstar Defensive Bond | Franklin Gold vs. Alliancebernstein Bond | Franklin Gold vs. Dreyfusstandish Global Fixed | Franklin Gold vs. Blrc Sgy Mnp |
Mfs International vs. Sprott Gold Equity | Mfs International vs. Global Gold Fund | Mfs International vs. James Balanced Golden | Mfs International vs. Franklin Gold Precious |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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