Correlation Between Franklin Templeton and Ab Municipal
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Ab Municipal 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 Templeton and Ab Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton Smacs and Ab Municipal Income, you can compare the effects of market volatilities on Franklin Templeton and Ab Municipal 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 Templeton with a short position of Ab Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Ab Municipal.
Diversification Opportunities for Franklin Templeton and Ab Municipal
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and MISHX is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Smacs and Ab Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Municipal Income and Franklin Templeton 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 Templeton Smacs are associated (or correlated) with Ab Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Municipal Income has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Ab Municipal go up and down completely randomly.
Pair Corralation between Franklin Templeton and Ab Municipal
Assuming the 90 days horizon Franklin Templeton Smacs is expected to generate 1.06 times more return on investment than Ab Municipal. However, Franklin Templeton is 1.06 times more volatile than Ab Municipal Income. It trades about 0.08 of its potential returns per unit of risk. Ab Municipal Income is currently generating about 0.08 per unit of risk. If you would invest 794.00 in Franklin Templeton Smacs on September 2, 2024 and sell it today you would earn a total of 105.00 from holding Franklin Templeton Smacs or generate 13.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton Smacs vs. Ab Municipal Income
Performance |
| Timeline |
| Franklin Templeton Smacs |
| Ab Municipal Income |
Franklin Templeton and Ab Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Ab Municipal
The main advantage of trading using opposite Franklin Templeton and Ab Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Ab Municipal 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 Municipal will offset losses from the drop in Ab Municipal's long position.| Franklin Templeton vs. Eagle Mlp Strategy | Franklin Templeton vs. Goldman Sachs Emerging | Franklin Templeton vs. Growth Strategy Fund | Franklin Templeton vs. Siit Emerging Markets |
| Ab Municipal vs. Ab Global E | Ab Municipal vs. Ab Global E | Ab Municipal vs. Ab Global E | Ab Municipal vs. Ab Minnesota Portfolio |
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 CEOs Directory module to screen CEOs from public companies around the world.
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