Correlation Between Franklin Gold and Altegris/aaca Opportunistic

Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Altegris/aaca Opportunistic 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 Altegris/aaca Opportunistic 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 Altegrisaaca Opportunistic Real, you can compare the effects of market volatilities on Franklin Gold and Altegris/aaca Opportunistic 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 Altegris/aaca Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Altegris/aaca Opportunistic.

Diversification Opportunities for Franklin Gold and Altegris/aaca Opportunistic

-0.55

Correlation Coefficient

Franklin Gold  Altegris/aaca Opportunistic

Excellent diversification

The 3 months correlation between Franklin and Altegris/aaca is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Altegrisaaca Opportunistic Rea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altegris/aaca Opportunistic 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 Altegris/aaca Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altegris/aaca Opportunistic has no effect on the direction of Franklin Gold i.e., Franklin Gold and Altegris/aaca Opportunistic go up and down completely randomly.

Pair Corralation between Franklin Gold and Altegris/aaca Opportunistic

Assuming the 90 days horizon Franklin Gold Precious is expected to generate 1.3 times more return on investment than Altegris/aaca Opportunistic. However, Franklin Gold is 1.3 times more volatile than Altegrisaaca Opportunistic Real. It trades about 0.33 of its potential returns per unit of risk. Altegrisaaca Opportunistic Real is currently generating about -0.1 per unit of risk. If you would invest  1,500  in Franklin Gold Precious on December 25, 2024 and sell it today you would earn a total of  538.00  from holding Franklin Gold Precious or generate 35.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Franklin Gold Precious  vs.  Altegrisaaca Opportunistic Rea

Franklin Gold Precious

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Gold Precious are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Franklin Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Altegris/aaca Opportunistic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Altegrisaaca Opportunistic Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Franklin Gold and Altegris/aaca Opportunistic

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

The idea behind Franklin Gold Precious and Altegrisaaca Opportunistic Real 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.