Correlation Between Franklin High and Alliancebernstein
Can any of the company-specific risk be diversified away by investing in both Franklin High and Alliancebernstein 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 High and Alliancebernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin High Income and Alliancebernstein Global High, you can compare the effects of market volatilities on Franklin High and Alliancebernstein 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 High with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Alliancebernstein.
Diversification Opportunities for Franklin High and Alliancebernstein
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Alliancebernstein is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Income and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Franklin High 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 High Income are associated (or correlated) with Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Franklin High i.e., Franklin High and Alliancebernstein go up and down completely randomly.
Pair Corralation between Franklin High and Alliancebernstein
Assuming the 90 days horizon Franklin High is expected to generate 1.41 times less return on investment than Alliancebernstein. But when comparing it to its historical volatility, Franklin High Income is 1.95 times less risky than Alliancebernstein. It trades about 0.11 of its potential returns per unit of risk. Alliancebernstein Global High is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 839.00 in Alliancebernstein Global High on August 30, 2024 and sell it today you would earn a total of 258.00 from holding Alliancebernstein Global High or generate 30.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Income vs. Alliancebernstein Global High
Performance |
| Timeline |
| Franklin High Income |
| Alliancebernstein |
Franklin High and Alliancebernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Alliancebernstein
The main advantage of trading using opposite Franklin High and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Alliancebernstein 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 Alliancebernstein will offset losses from the drop in Alliancebernstein's long position.| Franklin High vs. Davis Financial Fund | Franklin High vs. 1919 Financial Services | Franklin High vs. Prudential Jennison Financial | Franklin High vs. Gabelli Global Financial |
| Alliancebernstein vs. Gabelli Global Small | Alliancebernstein vs. MFS Investment Grade | Alliancebernstein vs. Eaton Vance National | Alliancebernstein vs. GAMCO Natural Resources |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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