Correlation Between Franklin Gold and ZKB Silver

Can any of the company-specific risk be diversified away by investing in both Franklin Gold and ZKB Silver 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 ZKB Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Franklin Gold And and ZKB Silver ETF, you can compare the effects of market volatilities on Franklin Gold and ZKB Silver 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 ZKB Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and ZKB Silver.

Diversification Opportunities for Franklin Gold and ZKB Silver

0.48

Correlation Coefficient

Franklin Gold  ZKB Silver

Very weak diversification

The 3 months correlation between Franklin and ZKB is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold And and ZKB Silver ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Silver ETF 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 And are associated (or correlated) with ZKB Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Silver ETF has no effect on the direction of Franklin Gold i.e., Franklin Gold and ZKB Silver go up and down completely randomly.

Pair Corralation between Franklin Gold and ZKB Silver

Assuming the 90 days horizon Franklin Gold And is expected to generate 0.96 times more return on investment than ZKB Silver. However, Franklin Gold And is 1.04 times less risky than ZKB Silver. It trades about 0.16 of its potential returns per unit of risk. ZKB Silver ETF is currently generating about 0.0 per unit of risk. If you would invest  1,690  in Franklin Gold And on January 26, 2024 and sell it today you would earn a total of  295.00  from holding Franklin Gold And or generate 17.46% return on investment over 90 days.

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

Franklin Gold And  vs.  ZKB Silver ETF

Franklin Gold And

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Gold And are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Franklin Gold showed solid returns over the last few months and may actually be approaching a breakup point.

ZKB Silver ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZKB Silver ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, ZKB Silver is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Franklin Gold and ZKB Silver

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

The idea behind Franklin Gold And and ZKB Silver ETF 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.