Correlation Between Lord Abbett and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Franklin Mutual 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 Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Diversified and Franklin Mutual Global, you can compare the effects of market volatilities on Lord Abbett and Franklin Mutual 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 Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Franklin Mutual.
Diversification Opportunities for Lord Abbett and Franklin Mutual
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lord and Franklin is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Diversified and Franklin Mutual Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Global 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 Diversified are associated (or correlated) with Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Global has no effect on the direction of Lord Abbett i.e., Lord Abbett and Franklin Mutual go up and down completely randomly.
Pair Corralation between Lord Abbett and Franklin Mutual
Assuming the 90 days horizon Lord Abbett Diversified is expected to generate 0.44 times more return on investment than Franklin Mutual. However, Lord Abbett Diversified is 2.27 times less risky than Franklin Mutual. It trades about 0.11 of its potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.04 per unit of risk. If you would invest 1,359 in Lord Abbett Diversified on August 30, 2024 and sell it today you would earn a total of 286.00 from holding Lord Abbett Diversified or generate 21.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Diversified vs. Franklin Mutual Global
Performance |
| Timeline |
| Lord Abbett Diversified |
| Franklin Mutual Global |
Lord Abbett and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Franklin Mutual
The main advantage of trading using opposite Lord Abbett and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Franklin Mutual 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 Mutual will offset losses from the drop in Franklin Mutual's long position.| Lord Abbett vs. Guggenheim Diversified Income | Lord Abbett vs. Fidelity Advisor Diversified | Lord Abbett vs. Small Cap Stock | Lord Abbett vs. Western Asset Diversified |
| Franklin Mutual vs. Pace Smallmedium Value | Franklin Mutual vs. Fpa Queens Road | Franklin Mutual vs. Lord Abbett Small | Franklin Mutual vs. Ultramid Cap Profund Ultramid Cap |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Correlations Find global opportunities by holding instruments from different markets |