Correlation Between Franklin New and Ambrus Core
Can any of the company-specific risk be diversified away by investing in both Franklin New and Ambrus Core 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 Ambrus Core 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 Ambrus Core Bond, you can compare the effects of market volatilities on Franklin New and Ambrus Core 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 Ambrus Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin New and Ambrus Core.
Diversification Opportunities for Franklin New and Ambrus Core
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Ambrus is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Franklin New York and Ambrus Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambrus Core Bond 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 Ambrus Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambrus Core Bond has no effect on the direction of Franklin New i.e., Franklin New and Ambrus Core go up and down completely randomly.
Pair Corralation between Franklin New and Ambrus Core
Assuming the 90 days horizon Franklin New is expected to generate 1.3 times less return on investment than Ambrus Core. In addition to that, Franklin New is 1.12 times more volatile than Ambrus Core Bond. It trades about 0.07 of its total potential returns per unit of risk. Ambrus Core Bond is currently generating about 0.1 per unit of volatility. If you would invest 918.00 in Ambrus Core Bond on September 2, 2024 and sell it today you would earn a total of 81.00 from holding Ambrus Core Bond or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin New York vs. Ambrus Core Bond
Performance |
| Timeline |
| Franklin New York |
| Ambrus Core Bond |
Franklin New and Ambrus Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin New and Ambrus Core
The main advantage of trading using opposite Franklin New and Ambrus Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin New position performs unexpectedly, Ambrus Core 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 Ambrus Core will offset losses from the drop in Ambrus Core'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 |
| Ambrus Core vs. John Hancock Financial | Ambrus Core vs. Vanguard Financials Index | Ambrus Core vs. Transamerica Financial Life | Ambrus Core vs. Blackrock Financial Institutions |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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