Correlation Between Lord Abbett and Franklin Total
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Franklin Total 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 Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Inflation and Franklin Total Return, you can compare the effects of market volatilities on Lord Abbett and Franklin Total 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 Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Franklin Total.
Diversification Opportunities for Lord Abbett and Franklin Total
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lord and Franklin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Inflation and Franklin Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Total Return 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 Inflation are associated (or correlated) with Franklin Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Total Return has no effect on the direction of Lord Abbett i.e., Lord Abbett and Franklin Total go up and down completely randomly.
Pair Corralation between Lord Abbett and Franklin Total
Assuming the 90 days horizon Lord Abbett is expected to generate 1.5 times less return on investment than Franklin Total. But when comparing it to its historical volatility, Lord Abbett Inflation is 2.35 times less risky than Franklin Total. It trades about 0.13 of its potential returns per unit of risk. Franklin Total Return is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 798.00 in Franklin Total Return on September 3, 2024 and sell it today you would earn a total of 39.00 from holding Franklin Total Return or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Inflation vs. Franklin Total Return
Performance |
| Timeline |
| Lord Abbett Inflation |
| Franklin Total Return |
Lord Abbett and Franklin Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Franklin Total
The main advantage of trading using opposite Lord Abbett and Franklin Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Franklin Total 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 Total will offset losses from the drop in Franklin Total's long position.| Lord Abbett vs. Health Biotchnology Portfolio | Lord Abbett vs. Invesco Global Health | Lord Abbett vs. Health Biotchnology Portfolio | Lord Abbett vs. Baillie Gifford Health |
| Franklin Total vs. Fidelity Sai Convertible | Franklin Total vs. Absolute Convertible Arbitrage | Franklin Total vs. Virtus Convertible | Franklin Total vs. Gabelli Convertible And |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |