Correlation Between Lord Abbett and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Franklin Templeton 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 Lord Abbett and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Convertible and Franklin Templeton Smacs, you can compare the effects of market volatilities on Lord Abbett and Franklin Templeton 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 Lord Abbett with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Franklin Templeton.
Diversification Opportunities for Lord Abbett and Franklin Templeton
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lord and Franklin is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible and Franklin Templeton Smacs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton Smacs and Lord Abbett 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 Lord Abbett Convertible are associated (or correlated) with Franklin Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton Smacs has no effect on the direction of Lord Abbett i.e., Lord Abbett and Franklin Templeton go up and down completely randomly.
Pair Corralation between Lord Abbett and Franklin Templeton
Assuming the 90 days horizon Lord Abbett Convertible is expected to under-perform the Franklin Templeton. In addition to that, Lord Abbett is 2.45 times more volatile than Franklin Templeton Smacs. It trades about -0.02 of its total potential returns per unit of risk. Franklin Templeton Smacs is currently generating about 0.19 per unit of volatility. If you would invest 931.00 in Franklin Templeton Smacs on November 27, 2024 and sell it today you would earn a total of 9.00 from holding Franklin Templeton Smacs or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Convertible vs. Franklin Templeton Smacs
Performance |
| Timeline |
| Lord Abbett Convertible |
| Franklin Templeton Smacs |
Lord Abbett and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Franklin Templeton
The main advantage of trading using opposite Lord Abbett and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Franklin Templeton 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 Franklin Templeton will offset losses from the drop in Franklin Templeton's long position.| Lord Abbett vs. Technology Ultrasector Profund | Lord Abbett vs. Red Oak Technology | Lord Abbett vs. Global Technology Portfolio | Lord Abbett vs. Columbia Global Technology |
| Franklin Templeton vs. Western Asset Smash | Franklin Templeton vs. Fixed Income Shares | Franklin Templeton vs. Municipal Total Return | Franklin Templeton vs. Western Asset Smash |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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