Correlation Between Franklin Gold and Wasatch Us

Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Wasatch Us 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 Wasatch Us 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 Wasatch Select Investor, you can compare the effects of market volatilities on Franklin Gold and Wasatch Us 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 Wasatch Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Wasatch Us.

Diversification Opportunities for Franklin Gold and Wasatch Us

-0.04

Correlation Coefficient

Franklin Gold  Wasatch Us

Good diversification

The 3 months correlation between Franklin and Wasatch is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Wasatch Select Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Select Investor 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 Wasatch Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Select Investor has no effect on the direction of Franklin Gold i.e., Franklin Gold and Wasatch Us go up and down completely randomly.

Pair Corralation between Franklin Gold and Wasatch Us

Assuming the 90 days horizon Franklin Gold is expected to generate 2.01 times less return on investment than Wasatch Us. In addition to that, Franklin Gold is 1.95 times more volatile than Wasatch Select Investor. It trades about 0.06 of its total potential returns per unit of risk. Wasatch Select Investor is currently generating about 0.22 per unit of volatility. If you would invest  1,462  in Wasatch Select Investor on September 5, 2024 and sell it today you would earn a total of  199.00  from holding Wasatch Select Investor or generate 13.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Franklin Gold Precious  vs.  Wasatch Select Investor

Franklin Gold Precious

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Gold Precious are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Franklin Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Wasatch Select Investor

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wasatch Select Investor are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Wasatch Us showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Franklin Gold and Wasatch Us

The main advantage of trading using opposite Franklin Gold and Wasatch Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Wasatch Us 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 Wasatch Us will offset losses from the drop in Wasatch Us' long position.

The idea behind Franklin Gold Precious and Wasatch Select Investor pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.