Correlation Between Alliancebernstein and Franklin California
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Franklin California 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 Alliancebernstein and Franklin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliancebernstein National Municipal and Franklin California High, you can compare the effects of market volatilities on Alliancebernstein and Franklin California 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 Alliancebernstein with a short position of Franklin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Franklin California.
Diversification Opportunities for Alliancebernstein and Franklin California
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alliancebernstein and Franklin is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Franklin California High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California High and Alliancebernstein 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 Alliancebernstein National Municipal are associated (or correlated) with Franklin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California High has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Franklin California go up and down completely randomly.
Pair Corralation between Alliancebernstein and Franklin California
Considering the 90-day investment horizon Alliancebernstein National Municipal is expected to generate 2.23 times more return on investment than Franklin California. However, Alliancebernstein is 2.23 times more volatile than Franklin California High. It trades about 0.08 of its potential returns per unit of risk. Franklin California High is currently generating about 0.11 per unit of risk. If you would invest 970.00 in Alliancebernstein National Municipal on September 12, 2024 and sell it today you would earn a total of 172.00 from holding Alliancebernstein National Municipal or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliancebernstein National Mun vs. Franklin California High
Performance |
| Timeline |
| Alliancebernstein |
| Franklin California High |
Alliancebernstein and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Franklin California
The main advantage of trading using opposite Alliancebernstein and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, Franklin California 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 California will offset losses from the drop in Franklin California's long position.| Alliancebernstein vs. Oxford Lane Capital | Alliancebernstein vs. Orchid Island Capital | Alliancebernstein vs. Guggenheim Strategic Opportunities | Alliancebernstein vs. Stone Harbor Emerging |
| Franklin California vs. Alliancebernstein National Municipal | Franklin California vs. Versatile Bond Portfolio | Franklin California vs. T Rowe Price | Franklin California vs. The National Tax Free |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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