Correlation Between Franklin Gold and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Franklin Gold 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 Gold 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 Gold Precious and Lord Abbett Short, you can compare the effects of market volatilities on Franklin Gold 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 Gold with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Lord Abbett.
Diversification Opportunities for Franklin Gold and Lord Abbett
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Lord is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Lord Abbett Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Short and Franklin Gold 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 Gold Precious 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 Short has no effect on the direction of Franklin Gold i.e., Franklin Gold and Lord Abbett go up and down completely randomly.
Pair Corralation between Franklin Gold and Lord Abbett
Assuming the 90 days horizon Franklin Gold Precious is expected to under-perform the Lord Abbett. In addition to that, Franklin Gold is 12.8 times more volatile than Lord Abbett Short. It trades about -0.25 of its total potential returns per unit of risk. Lord Abbett Short is currently generating about 0.15 per unit of volatility. If you would invest 386.00 in Lord Abbett Short on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Lord Abbett Short or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Lord Abbett Short
Performance |
| Timeline |
| Franklin Gold Precious |
| Lord Abbett Short |
Franklin Gold and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Lord Abbett
The main advantage of trading using opposite Franklin Gold and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold 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 Gold vs. First Eagle Gold | Franklin Gold vs. Oppenheimer Gold Special | Franklin Gold vs. Aquagold International | Franklin Gold vs. Morningstar Unconstrained Allocation |
| Lord Abbett vs. James Balanced Golden | Lord Abbett vs. Great West Goldman Sachs | Lord Abbett vs. Precious Metals And | Lord Abbett vs. Franklin Gold Precious |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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