Correlation Between Franklin New and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Franklin New 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 New 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 New York and Lord Abbett Inflation, you can compare the effects of market volatilities on Franklin New 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 New with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin New and Lord Abbett.
Diversification Opportunities for Franklin New and Lord Abbett
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Lord is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Franklin New York and Lord Abbett Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Inflation and Franklin New 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 New York 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 Inflation has no effect on the direction of Franklin New i.e., Franklin New and Lord Abbett go up and down completely randomly.
Pair Corralation between Franklin New and Lord Abbett
Assuming the 90 days horizon Franklin New York is expected to generate 2.53 times more return on investment than Lord Abbett. However, Franklin New is 2.53 times more volatile than Lord Abbett Inflation. It trades about 0.2 of its potential returns per unit of risk. Lord Abbett Inflation is currently generating about 0.03 per unit of risk. If you would invest 1,000.00 in Franklin New York on September 4, 2024 and sell it today you would earn a total of 15.00 from holding Franklin New York or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin New York vs. Lord Abbett Inflation
Performance |
| Timeline |
| Franklin New York |
| Lord Abbett Inflation |
Franklin New and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin New and Lord Abbett
The main advantage of trading using opposite Franklin New and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin New 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 New vs. Franklin Mutual Beacon | Franklin New vs. Templeton Developing Markets | Franklin New vs. Franklin Mutual Global | Franklin New vs. Franklin Mutual Global |
| Lord Abbett vs. Balanced Fund Retail | Lord Abbett vs. Us Vector Equity | Lord Abbett vs. Gmo Global Equity | Lord Abbett vs. Nationwide Global Equity |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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