Correlation Between Franklin Government and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Franklin Government 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 Government 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 Government Securities and Lord Abbett Government, you can compare the effects of market volatilities on Franklin Government 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 Government with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Lord Abbett.
Diversification Opportunities for Franklin Government and Lord Abbett
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Lord is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Securities and Lord Abbett Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Government and Franklin Government 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 Government Securities 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 Government has no effect on the direction of Franklin Government i.e., Franklin Government and Lord Abbett go up and down completely randomly.
Pair Corralation between Franklin Government and Lord Abbett
If you would invest 506.00 in Franklin Government Securities on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Franklin Government Securities or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Government Securities vs. Lord Abbett Government
Performance |
| Timeline |
| Franklin Government |
| Lord Abbett Government |
Franklin Government and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Government and Lord Abbett
The main advantage of trading using opposite Franklin Government and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government 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 Government vs. Short Term Government Fund | Franklin Government vs. Dunham Porategovernment Bond | Franklin Government vs. Fidelity Series Government | Franklin Government vs. Lord Abbett Government |
| Lord Abbett vs. Vanguard Total Stock | Lord Abbett vs. Vanguard 500 Index | Lord Abbett vs. Vanguard Total Stock | Lord Abbett vs. Vanguard Total Stock |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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