Correlation Between Ab Bond and Franklin Emerging
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Franklin Emerging 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 Ab Bond and Franklin Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Franklin Emerging Market, you can compare the effects of market volatilities on Ab Bond and Franklin Emerging 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 Ab Bond with a short position of Franklin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Franklin Emerging.
Diversification Opportunities for Ab Bond and Franklin Emerging
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ABNYX and Franklin is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Franklin Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Emerging Market and Ab Bond 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 Ab Bond Inflation are associated (or correlated) with Franklin Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Emerging Market has no effect on the direction of Ab Bond i.e., Ab Bond and Franklin Emerging go up and down completely randomly.
Pair Corralation between Ab Bond and Franklin Emerging
Assuming the 90 days horizon Ab Bond Inflation is expected to generate 0.19 times more return on investment than Franklin Emerging. However, Ab Bond Inflation is 5.33 times less risky than Franklin Emerging. It trades about -0.27 of its potential returns per unit of risk. Franklin Emerging Market is currently generating about -0.28 per unit of risk. If you would invest 1,042 in Ab Bond Inflation on October 10, 2024 and sell it today you would lose (10.00) from holding Ab Bond Inflation or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ab Bond Inflation vs. Franklin Emerging Market
Performance |
| Timeline |
| Ab Bond Inflation |
| Franklin Emerging Market |
Ab Bond and Franklin Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Franklin Emerging
The main advantage of trading using opposite Ab Bond and Franklin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Franklin Emerging 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 Emerging will offset losses from the drop in Franklin Emerging's long position.| Ab Bond vs. Baron Real Estate | Ab Bond vs. Amg Managers Centersquare | Ab Bond vs. Forum Real Estate | Ab Bond vs. Dfa Real Estate |
| Franklin Emerging vs. John Hancock Financial | Franklin Emerging vs. Mesirow Financial Small | Franklin Emerging vs. Icon Financial Fund | Franklin Emerging vs. Prudential Financial Services |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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