Correlation Between Franklin Adjustable and Ab Bond
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Ab Bond 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 Franklin Adjustable and Ab Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Adjustable Government and Ab Bond Inflation, you can compare the effects of market volatilities on Franklin Adjustable and Ab Bond 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 Franklin Adjustable with a short position of Ab Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Ab Bond.
Diversification Opportunities for Franklin Adjustable and Ab Bond
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and ANBIX is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Ab Bond Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Bond Inflation and Franklin Adjustable 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 Franklin Adjustable Government are associated (or correlated) with Ab Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Bond Inflation has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Ab Bond go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Ab Bond
Assuming the 90 days horizon Franklin Adjustable Government is not expected to generate positive returns. However, Franklin Adjustable Government is 2.27 times less risky than Ab Bond. It waists most of its returns potential to compensate for thr risk taken. Ab Bond is generating about 0.36 per unit of risk. If you would invest 1,016 in Ab Bond Inflation on November 7, 2024 and sell it today you would earn a total of 12.00 from holding Ab Bond Inflation or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Ab Bond Inflation
Performance |
| Timeline |
| Franklin Adjustable |
| Ab Bond Inflation |
Franklin Adjustable and Ab Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Ab Bond
The main advantage of trading using opposite Franklin Adjustable and Ab Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Ab Bond 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 Ab Bond will offset losses from the drop in Ab Bond's long position.| Franklin Adjustable vs. Franklin Mutual Beacon | Franklin Adjustable vs. Templeton Developing Markets | Franklin Adjustable vs. Franklin Mutual Global | Franklin Adjustable 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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