Correlation Between L Abbett and Franklin Fund
Can any of the company-specific risk be diversified away by investing in both L Abbett and Franklin Fund 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 L Abbett and Franklin Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L Abbett Growth and Franklin Fund Allocator, you can compare the effects of market volatilities on L Abbett and Franklin Fund 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 L Abbett with a short position of Franklin Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Franklin Fund.
Diversification Opportunities for L Abbett and Franklin Fund
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between LGLSX and Franklin is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Franklin Fund Allocator in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Fund Allocator and L 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 L Abbett Growth are associated (or correlated) with Franklin Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Fund Allocator has no effect on the direction of L Abbett i.e., L Abbett and Franklin Fund go up and down completely randomly.
Pair Corralation between L Abbett and Franklin Fund
Assuming the 90 days horizon L Abbett Growth is expected to generate 1.52 times more return on investment than Franklin Fund. However, L Abbett is 1.52 times more volatile than Franklin Fund Allocator. It trades about 0.1 of its potential returns per unit of risk. Franklin Fund Allocator is currently generating about 0.05 per unit of risk. If you would invest 2,570 in L Abbett Growth on August 30, 2024 and sell it today you would earn a total of 2,181 from holding L Abbett Growth or generate 84.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Abbett Growth vs. Franklin Fund Allocator
Performance |
| Timeline |
| L Abbett Growth |
| Franklin Fund Allocator |
L Abbett and Franklin Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Abbett and Franklin Fund
The main advantage of trading using opposite L Abbett and Franklin Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett position performs unexpectedly, Franklin Fund 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 Fund will offset losses from the drop in Franklin Fund's long position.| L Abbett vs. Growth Fund Of | L Abbett vs. HUMANA INC | L Abbett vs. Aquagold International | L Abbett vs. Barloworld Ltd ADR |
| Franklin Fund vs. Touchstone Ohio Tax | Franklin Fund vs. Artisan High Income | Franklin Fund vs. Ambrus Core Bond | Franklin Fund vs. Angel Oak Financial |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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