Correlation Between Franklin Federal and Alliancebernstein
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Alliancebernstein 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 Federal and Alliancebernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Federal Limited Term and Alliancebernstein National Municipal, you can compare the effects of market volatilities on Franklin Federal and Alliancebernstein 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 Federal with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Alliancebernstein.
Diversification Opportunities for Franklin Federal and Alliancebernstein
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Alliancebernstein is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Franklin Federal 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 Federal Limited Term are associated (or correlated) with Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Franklin Federal i.e., Franklin Federal and Alliancebernstein go up and down completely randomly.
Pair Corralation between Franklin Federal and Alliancebernstein
Assuming the 90 days horizon Franklin Federal Limited Term is expected to generate 0.09 times more return on investment than Alliancebernstein. However, Franklin Federal Limited Term is 10.99 times less risky than Alliancebernstein. It trades about 0.25 of its potential returns per unit of risk. Alliancebernstein National Municipal is currently generating about -0.02 per unit of risk. If you would invest 1,030 in Franklin Federal Limited Term on September 15, 2024 and sell it today you would earn a total of 3.00 from holding Franklin Federal Limited Term or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Federal Limited Term vs. Alliancebernstein National Mun
Performance |
| Timeline |
| Franklin Federal Lim |
| Alliancebernstein |
Franklin Federal and Alliancebernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Alliancebernstein
The main advantage of trading using opposite Franklin Federal and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Alliancebernstein 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 Alliancebernstein will offset losses from the drop in Alliancebernstein's long position.| Franklin Federal vs. Franklin Mutual Beacon | Franklin Federal vs. Templeton Developing Markets | Franklin Federal vs. Franklin Mutual Global | Franklin Federal vs. Franklin Mutual Global |
| Alliancebernstein vs. GCM Grosvenor | Alliancebernstein vs. Invesco Municipal Opportunity | Alliancebernstein vs. Blackrock Municipal Target | Alliancebernstein vs. Cohen Steers Qualityome |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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