Correlation Between Franklin Emerging and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging 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 Emerging 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 Emerging Market and Lord Abbett Short, you can compare the effects of market volatilities on Franklin Emerging 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 Emerging with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Lord Abbett.
Diversification Opportunities for Franklin Emerging and Lord Abbett
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Lord is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Lord Abbett Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Short and Franklin Emerging 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 Emerging Market 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 Short has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Lord Abbett go up and down completely randomly.
Pair Corralation between Franklin Emerging and Lord Abbett
Assuming the 90 days horizon Franklin Emerging Market is expected to under-perform the Lord Abbett. In addition to that, Franklin Emerging is 5.35 times more volatile than Lord Abbett Short. It trades about -0.26 of its total potential returns per unit of risk. Lord Abbett Short is currently generating about -0.37 per unit of volatility. If you would invest 997.00 in Lord Abbett Short on October 14, 2024 and sell it today you would lose (13.00) from holding Lord Abbett Short or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Lord Abbett Short
Performance |
| Timeline |
| Franklin Emerging Market |
| Lord Abbett Short |
Franklin Emerging and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Lord Abbett
The main advantage of trading using opposite Franklin Emerging and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging 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 Emerging vs. Fidelity Capital Income | Franklin Emerging vs. Artisan High Income | Franklin Emerging vs. Neuberger Berman Income | Franklin Emerging vs. Inverse High Yield |
| Lord Abbett vs. Franklin Emerging Market | Lord Abbett vs. Eagle Mlp Strategy | Lord Abbett vs. Nasdaq 100 2x Strategy | Lord Abbett vs. Mid Cap 15x Strategy |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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