Correlation Between Ab Select and Franklin New
Can any of the company-specific risk be diversified away by investing in both Ab Select and Franklin New 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 Select and Franklin New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Longshort and Franklin New Jersey, you can compare the effects of market volatilities on Ab Select and Franklin New 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 Select with a short position of Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Franklin New.
Diversification Opportunities for Ab Select and Franklin New
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASCLX and FRANKLIN is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Longshort and Franklin New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New Jersey and Ab Select 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 Select Longshort are associated (or correlated) with Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New Jersey has no effect on the direction of Ab Select i.e., Ab Select and Franklin New go up and down completely randomly.
Pair Corralation between Ab Select and Franklin New
Assuming the 90 days horizon Ab Select Longshort is expected to generate 2.32 times more return on investment than Franklin New. However, Ab Select is 2.32 times more volatile than Franklin New Jersey. It trades about 0.18 of its potential returns per unit of risk. Franklin New Jersey is currently generating about 0.17 per unit of risk. If you would invest 1,121 in Ab Select Longshort on September 1, 2024 and sell it today you would earn a total of 287.00 from holding Ab Select Longshort or generate 25.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Ab Select Longshort vs. Franklin New Jersey
Performance |
| Timeline |
| Ab Select Longshort |
| Franklin New Jersey |
Ab Select and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Franklin New
The main advantage of trading using opposite Ab Select and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Franklin New 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 New will offset losses from the drop in Franklin New's long position.| Ab Select vs. Pace International Emerging | Ab Select vs. Goldman Sachs Emerging | Ab Select vs. Barings Emerging Markets | Ab Select vs. Artisan Emerging Markets |
| Franklin New vs. Franklin Mutual Beacon | Franklin New vs. Templeton Developing Markets | Franklin New vs. Franklin Mutual Global | Franklin New 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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