Correlation Between Franklin High and Aberdeen China
Can any of the company-specific risk be diversified away by investing in both Franklin High and Aberdeen China 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 Aberdeen China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin High Yield and Aberdeen China Oppty, you can compare the effects of market volatilities on Franklin High and Aberdeen China 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 Aberdeen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Aberdeen China.
Diversification Opportunities for Franklin High and Aberdeen China
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Aberdeen is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Aberdeen China Oppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen China Oppty 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 Yield are associated (or correlated) with Aberdeen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen China Oppty has no effect on the direction of Franklin High i.e., Franklin High and Aberdeen China go up and down completely randomly.
Pair Corralation between Franklin High and Aberdeen China
Assuming the 90 days horizon Franklin High Yield is expected to under-perform the Aberdeen China. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin High Yield is 6.79 times less risky than Aberdeen China. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Aberdeen China Oppty is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,830 in Aberdeen China Oppty on October 24, 2024 and sell it today you would earn a total of 191.00 from holding Aberdeen China Oppty or generate 10.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.78% |
| Values | Daily Returns |
Franklin High Yield vs. Aberdeen China Oppty
Performance |
| Timeline |
| Franklin High Yield |
| Aberdeen China Oppty |
Franklin High and Aberdeen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Aberdeen China
The main advantage of trading using opposite Franklin High and Aberdeen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Aberdeen China 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 Aberdeen China will offset losses from the drop in Aberdeen China's long position.| Franklin High vs. Rbc Funds Trust | Franklin High vs. Transamerica Asset Allocation | Franklin High vs. Rbc Global Equity | Franklin High vs. Dreyfusstandish Global Fixed |
| Aberdeen China vs. Franklin High Yield | Aberdeen China vs. Barings High Yield | Aberdeen China vs. Artisan High Income | Aberdeen China vs. T Rowe Price |
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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