Correlation Between Alliancebernstein and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Franklin Mutual 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 Mutual 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 Mutual European, you can compare the effects of market volatilities on Alliancebernstein and Franklin Mutual 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 Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Franklin Mutual.
Diversification Opportunities for Alliancebernstein and Franklin Mutual
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alliancebernstein and Franklin is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Franklin Mutual European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual European 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 Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual European has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Franklin Mutual go up and down completely randomly.
Pair Corralation between Alliancebernstein and Franklin Mutual
Considering the 90-day investment horizon Alliancebernstein is expected to generate 1.57 times less return on investment than Franklin Mutual. In addition to that, Alliancebernstein is 1.02 times more volatile than Franklin Mutual European. It trades about 0.13 of its total potential returns per unit of risk. Franklin Mutual European is currently generating about 0.22 per unit of volatility. If you would invest 2,465 in Franklin Mutual European on September 14, 2024 and sell it today you would earn a total of 59.00 from holding Franklin Mutual European or generate 2.39% 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 Mutual European
Performance |
| Timeline |
| Alliancebernstein |
| Franklin Mutual European |
Alliancebernstein and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Franklin Mutual
The main advantage of trading using opposite Alliancebernstein and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, Franklin Mutual 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 Mutual will offset losses from the drop in Franklin Mutual's long position.| Alliancebernstein vs. Eaton Vance Short | Alliancebernstein vs. Allianzgi Diversified Income | Alliancebernstein vs. Ares Dynamic Credit | Alliancebernstein vs. DWS Municipal Income |
| Franklin Mutual vs. Pace Municipal Fixed | Franklin Mutual vs. T Rowe Price | Franklin Mutual vs. Nuveen Minnesota Municipal | Franklin Mutual vs. Alliancebernstein National Municipal |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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