Correlation Between Ab High and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Ab High and Franklin Growth 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 High and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab High Income and Franklin Growth Opportunities, you can compare the effects of market volatilities on Ab High and Franklin Growth 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 High with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab High and Franklin Growth.
Diversification Opportunities for Ab High and Franklin Growth
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGDIX and Franklin is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ab High Income and Franklin Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Oppo and Ab High 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 High Income are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Oppo has no effect on the direction of Ab High i.e., Ab High and Franklin Growth go up and down completely randomly.
Pair Corralation between Ab High and Franklin Growth
Assuming the 90 days horizon Ab High is expected to generate 2.4 times less return on investment than Franklin Growth. But when comparing it to its historical volatility, Ab High Income is 4.09 times less risky than Franklin Growth. It trades about 0.15 of its potential returns per unit of risk. Franklin Growth Opportunities is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,895 in Franklin Growth Opportunities on September 12, 2024 and sell it today you would earn a total of 2,472 from holding Franklin Growth Opportunities or generate 63.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ab High Income vs. Franklin Growth Opportunities
Performance |
| Timeline |
| Ab High Income |
| Franklin Growth Oppo |
Ab High and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab High and Franklin Growth
The main advantage of trading using opposite Ab High and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab High position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.| Ab High vs. Blrc Sgy Mnp | Ab High vs. Dreyfusstandish Global Fixed | Ab High vs. Bbh Intermediate Municipal | Ab High vs. Artisan High Income |
| Franklin Growth vs. American Funds The | Franklin Growth vs. American Funds The | Franklin Growth vs. Growth Fund Of | Franklin Growth vs. Growth Fund Of |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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