Correlation Between Franklin and Ab Government
Can any of the company-specific risk be diversified away by investing in both Franklin and Ab Government 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 and Ab Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Government Money and Ab Government Exchange, you can compare the effects of market volatilities on Franklin and Ab Government 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 with a short position of Ab Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Ab Government.
Diversification Opportunities for Franklin and Ab Government
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and AIEXX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Ab Government Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Government Exchange and Franklin 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 Money are associated (or correlated) with Ab Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Government Exchange has no effect on the direction of Franklin i.e., Franklin and Ab Government go up and down completely randomly.
Pair Corralation between Franklin and Ab Government
Assuming the 90 days horizon Franklin Government Money is expected to under-perform the Ab Government. But the money market fund apears to be less risky and, when comparing its historical volatility, Franklin Government Money is 13.64 times less risky than Ab Government. The money market fund trades about -0.03 of its potential returns per unit of risk. The Ab Government Exchange is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 411.00 in Ab Government Exchange on October 11, 2024 and sell it today you would lose (311.00) from holding Ab Government Exchange or give up 75.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 52.63% |
| Values | Daily Returns |
Franklin Government Money vs. Ab Government Exchange
Performance |
| Timeline |
| Franklin Government Money |
| Ab Government Exchange |
Franklin and Ab Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Ab Government
The main advantage of trading using opposite Franklin and Ab Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin position performs unexpectedly, Ab Government 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 Ab Government will offset losses from the drop in Ab Government's long position.| Franklin vs. Mairs Power Growth | Franklin vs. T Rowe Price | Franklin vs. Transamerica Capital Growth | Franklin vs. T Rowe Price |
| Ab Government vs. Touchstone Small Cap | Ab Government vs. Champlain Small | Ab Government vs. Artisan Small Cap | Ab Government vs. Hunter Small Cap |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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