Correlation Between Ab Minnesota and Franklin Minnesota
Can any of the company-specific risk be diversified away by investing in both Ab Minnesota and Franklin Minnesota 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 Minnesota and Franklin Minnesota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Minnesota Portfolio and Franklin Minnesota Tax Free, you can compare the effects of market volatilities on Ab Minnesota and Franklin Minnesota 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 Minnesota with a short position of Franklin Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Minnesota and Franklin Minnesota.
Diversification Opportunities for Ab Minnesota and Franklin Minnesota
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AMNAX and Franklin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ab Minnesota Portfolio and Franklin Minnesota Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Minnesota Tax and Ab Minnesota 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 Minnesota Portfolio are associated (or correlated) with Franklin Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Minnesota Tax has no effect on the direction of Ab Minnesota i.e., Ab Minnesota and Franklin Minnesota go up and down completely randomly.
Pair Corralation between Ab Minnesota and Franklin Minnesota
Assuming the 90 days horizon Ab Minnesota Portfolio is expected to generate 164.2 times more return on investment than Franklin Minnesota. However, Ab Minnesota is 164.2 times more volatile than Franklin Minnesota Tax Free. It trades about 0.04 of its potential returns per unit of risk. Franklin Minnesota Tax Free is currently generating about 0.06 per unit of risk. If you would invest 909.00 in Ab Minnesota Portfolio on September 4, 2024 and sell it today you would earn a total of 61.00 from holding Ab Minnesota Portfolio or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ab Minnesota Portfolio vs. Franklin Minnesota Tax Free
Performance |
| Timeline |
| Ab Minnesota Portfolio |
| Franklin Minnesota Tax |
Ab Minnesota and Franklin Minnesota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Minnesota and Franklin Minnesota
The main advantage of trading using opposite Ab Minnesota and Franklin Minnesota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Minnesota position performs unexpectedly, Franklin Minnesota 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 Minnesota will offset losses from the drop in Franklin Minnesota's long position.| Ab Minnesota vs. Goldman Sachs Managed | Ab Minnesota vs. Ab Bond Inflation | Ab Minnesota vs. Inflation Protected Bond Fund | Ab Minnesota vs. Arrow Managed Futures |
| Franklin Minnesota vs. Franklin Mutual Beacon | Franklin Minnesota vs. Templeton Developing Markets | Franklin Minnesota vs. Franklin Mutual Global | Franklin Minnesota vs. Franklin Mutual Global |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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