Correlation Between Guidemark Large and Franklin Equity
Can any of the company-specific risk be diversified away by investing in both Guidemark Large and Franklin Equity 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 Guidemark Large and Franklin Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidemark Large Cap and Franklin Equity Income, you can compare the effects of market volatilities on Guidemark Large and Franklin Equity 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 Guidemark Large with a short position of Franklin Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark Large and Franklin Equity.
Diversification Opportunities for Guidemark Large and Franklin Equity
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guidemark and Franklin is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap and Franklin Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Equity Income and Guidemark Large 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 Guidemark Large Cap are associated (or correlated) with Franklin Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Equity Income has no effect on the direction of Guidemark Large i.e., Guidemark Large and Franklin Equity go up and down completely randomly.
Pair Corralation between Guidemark Large and Franklin Equity
Assuming the 90 days horizon Guidemark Large is expected to generate 1.18 times less return on investment than Franklin Equity. In addition to that, Guidemark Large is 1.4 times more volatile than Franklin Equity Income. It trades about 0.16 of its total potential returns per unit of risk. Franklin Equity Income is currently generating about 0.26 per unit of volatility. If you would invest 3,183 in Franklin Equity Income on June 6, 2025 and sell it today you would earn a total of 267.00 from holding Franklin Equity Income or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidemark Large Cap vs. Franklin Equity Income
Performance |
| Timeline |
| Guidemark Large Cap |
| Franklin Equity Income |
Guidemark Large and Franklin Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidemark Large and Franklin Equity
The main advantage of trading using opposite Guidemark Large and Franklin Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark Large position performs unexpectedly, Franklin Equity 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 Equity will offset losses from the drop in Franklin Equity's long position.| Guidemark Large vs. Blackrock All Cap Energy | Guidemark Large vs. Gmo Resources | Guidemark Large vs. Gamco Natural Resources | Guidemark Large vs. Franklin Natural Resources |
| Franklin Equity vs. Western Assets Emerging | Franklin Equity vs. Harding Loevner Emerging | Franklin Equity vs. Hartford Emerging Markets | Franklin Equity vs. Investec Emerging Markets |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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