Correlation Between Franklin Dynatech and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Franklin Dynatech and Lord Abbett 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 Dynatech and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Dynatech Fund and Lord Abbett Bond, you can compare the effects of market volatilities on Franklin Dynatech and Lord Abbett 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 Dynatech with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Dynatech and Lord Abbett.
Diversification Opportunities for Franklin Dynatech and Lord Abbett
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Lord is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Dynatech Fund and Lord Abbett Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Bond and Franklin Dynatech 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 Dynatech Fund are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Bond has no effect on the direction of Franklin Dynatech i.e., Franklin Dynatech and Lord Abbett go up and down completely randomly.
Pair Corralation between Franklin Dynatech and Lord Abbett
Assuming the 90 days horizon Franklin Dynatech Fund is expected to generate 1.98 times more return on investment than Lord Abbett. However, Franklin Dynatech is 1.98 times more volatile than Lord Abbett Bond. It trades about 0.09 of its potential returns per unit of risk. Lord Abbett Bond is currently generating about 0.06 per unit of risk. If you would invest 12,628 in Franklin Dynatech Fund on September 2, 2024 and sell it today you would earn a total of 6,119 from holding Franklin Dynatech Fund or generate 48.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Dynatech Fund vs. Lord Abbett Bond
Performance |
| Timeline |
| Franklin Dynatech |
| Lord Abbett Bond |
Franklin Dynatech and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Dynatech and Lord Abbett
The main advantage of trading using opposite Franklin Dynatech and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Dynatech position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Franklin Dynatech vs. Mfs International Diversification | Franklin Dynatech vs. John Hancock Bond | Franklin Dynatech vs. Lord Abbett Bond | Franklin Dynatech vs. Prudential Total Return |
| Lord Abbett vs. Auer Growth Fund | Lord Abbett vs. T Rowe Price | Lord Abbett vs. Omni Small Cap Value | Lord Abbett vs. Balanced Fund Investor |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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