Correlation Between Lord Abbett and Franklin Federal
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Franklin Federal 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 Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Short and Franklin Federal Limited Term, you can compare the effects of market volatilities on Lord Abbett and Franklin Federal 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 Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Franklin Federal.
Diversification Opportunities for Lord Abbett and Franklin Federal
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Franklin is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and Franklin Federal Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Federal Lim 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 Short are associated (or correlated) with Franklin Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Federal Lim has no effect on the direction of Lord Abbett i.e., Lord Abbett and Franklin Federal go up and down completely randomly.
Pair Corralation between Lord Abbett and Franklin Federal
Assuming the 90 days horizon Lord Abbett is expected to generate 2.25 times less return on investment than Franklin Federal. In addition to that, Lord Abbett is 1.26 times more volatile than Franklin Federal Limited Term. It trades about 0.22 of its total potential returns per unit of risk. Franklin Federal Limited Term is currently generating about 0.62 per unit of volatility. If you would invest 1,029 in Franklin Federal Limited Term on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Franklin Federal Limited Term or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Short vs. Franklin Federal Limited Term
Performance |
| Timeline |
| Lord Abbett Short |
| Franklin Federal Lim |
Lord Abbett and Franklin Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Franklin Federal
The main advantage of trading using opposite Lord Abbett and Franklin Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Franklin Federal 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 Federal will offset losses from the drop in Franklin Federal's long position.| Lord Abbett vs. Blackrock Financial Institutions | Lord Abbett vs. Goldman Sachs Financial | Lord Abbett vs. Davis Financial Fund | Lord Abbett vs. Royce Global Financial |
| Franklin Federal vs. Franklin Mutual Beacon | Franklin Federal vs. Templeton Developing Markets | Franklin Federal vs. Franklin Mutual Global | Franklin Federal vs. Franklin Mutual Global |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |