Correlation Between Ab Global and Franklin
Can any of the company-specific risk be diversified away by investing in both Ab Global and Franklin 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 Global and Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Bond and Franklin Government Money, you can compare the effects of market volatilities on Ab Global and Franklin 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 Global with a short position of Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Franklin.
Diversification Opportunities for Ab Global and Franklin
Modest diversification
The 3 months correlation between ANAGX and Franklin is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money and Ab Global 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 Global Bond are associated (or correlated) with Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Ab Global i.e., Ab Global and Franklin go up and down completely randomly.
Pair Corralation between Ab Global and Franklin
Assuming the 90 days horizon Ab Global Bond is expected to generate 0.08 times more return on investment than Franklin. However, Ab Global Bond is 12.63 times less risky than Franklin. It trades about 0.05 of its potential returns per unit of risk. Franklin Government Money is currently generating about -0.04 per unit of risk. If you would invest 644.00 in Ab Global Bond on November 1, 2024 and sell it today you would earn a total of 44.00 from holding Ab Global Bond or generate 6.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Ab Global Bond vs. Franklin Government Money
Performance |
| Timeline |
| Ab Global Bond |
| Franklin Government Money |
Ab Global and Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Franklin
The main advantage of trading using opposite Ab Global and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Franklin 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 will offset losses from the drop in Franklin's long position.| Ab Global vs. Goldman Sachs Strategic | Ab Global vs. Precious Metals Fund | Ab Global vs. Vy Goldman Sachs | Ab Global vs. James Balanced Golden |
| Franklin vs. Vanguard Information Technology | Franklin vs. Science Technology Fund | Franklin vs. Blackrock Science Technology | Franklin vs. Dreyfus Technology Growth |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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