Correlation Between L Abbett and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both L Abbett and Franklin Growth 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 Growth 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 Growth Opportunities, you can compare the effects of market volatilities on L Abbett and Franklin Growth 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 Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Franklin Growth.
Diversification Opportunities for L Abbett and Franklin Growth
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between LGLSX and Franklin is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Franklin Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Oppo 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 Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Oppo has no effect on the direction of L Abbett i.e., L Abbett and Franklin Growth go up and down completely randomly.
Pair Corralation between L Abbett and Franklin Growth
Assuming the 90 days horizon L Abbett Growth is expected to generate 1.27 times more return on investment than Franklin Growth. However, L Abbett is 1.27 times more volatile than Franklin Growth Opportunities. It trades about 0.13 of its potential returns per unit of risk. Franklin Growth Opportunities is currently generating about 0.12 per unit of risk. If you would invest 4,920 in L Abbett Growth on October 26, 2024 and sell it today you would earn a total of 168.00 from holding L Abbett Growth or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Abbett Growth vs. Franklin Growth Opportunities
Performance |
| Timeline |
| L Abbett Growth |
| Franklin Growth Oppo |
L Abbett and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Abbett and Franklin Growth
The main advantage of trading using opposite L Abbett and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.| L Abbett vs. Voya Retirement Moderate | L Abbett vs. Blackrock Retirement Income | L Abbett vs. Hartford Moderate Allocation | L Abbett vs. Columbia Moderate Growth |
| Franklin Growth vs. Needham Aggressive Growth | Franklin Growth vs. Growth Allocation Fund | Franklin Growth vs. Riverparknext Century Growth | Franklin Growth vs. L Abbett Growth |
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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