Correlation Between Absolute Convertible and Franklin Total
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible and Franklin Total 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 Absolute Convertible and Franklin Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Franklin Total Return, you can compare the effects of market volatilities on Absolute Convertible and Franklin Total 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 Absolute Convertible with a short position of Franklin Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Franklin Total.
Diversification Opportunities for Absolute Convertible and Franklin Total
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Absolute and Franklin is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Franklin Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Total Return and Absolute Convertible 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 Absolute Convertible Arbitrage are associated (or correlated) with Franklin Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Total Return has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Franklin Total go up and down completely randomly.
Pair Corralation between Absolute Convertible and Franklin Total
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to generate 0.16 times more return on investment than Franklin Total. However, Absolute Convertible Arbitrage is 6.24 times less risky than Franklin Total. It trades about 0.37 of its potential returns per unit of risk. Franklin Total Return is currently generating about 0.04 per unit of risk. If you would invest 1,020 in Absolute Convertible Arbitrage on September 3, 2024 and sell it today you would earn a total of 130.00 from holding Absolute Convertible Arbitrage or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Franklin Total Return
Performance |
| Timeline |
| Absolute Convertible |
| Franklin Total Return |
Absolute Convertible and Franklin Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Franklin Total
The main advantage of trading using opposite Absolute Convertible and Franklin Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible position performs unexpectedly, Franklin Total 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 Total will offset losses from the drop in Franklin Total's long position.| Absolute Convertible vs. Dunham Porategovernment Bond | Absolute Convertible vs. John Hancock Government | Absolute Convertible vs. Government Securities Fund | Absolute Convertible vs. Ab Government Exchange |
| Franklin Total vs. Fidelity Sai Convertible | Franklin Total vs. Absolute Convertible Arbitrage | Franklin Total vs. Virtus Convertible | Franklin Total vs. Gabelli Convertible And |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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