Correlation Between Ab Municipal and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Franklin Templeton 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 Ab Municipal and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Municipal Income and Franklin Templeton Smacs, you can compare the effects of market volatilities on Ab Municipal and Franklin Templeton 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 Ab Municipal with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Franklin Templeton.
Diversification Opportunities for Ab Municipal and Franklin Templeton
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MISHX and Franklin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Income and Franklin Templeton Smacs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton Smacs and Ab Municipal 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 Ab Municipal Income are associated (or correlated) with Franklin Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton Smacs has no effect on the direction of Ab Municipal i.e., Ab Municipal and Franklin Templeton go up and down completely randomly.
Pair Corralation between Ab Municipal and Franklin Templeton
Assuming the 90 days horizon Ab Municipal is expected to generate 1.06 times less return on investment than Franklin Templeton. But when comparing it to its historical volatility, Ab Municipal Income is 1.04 times less risky than Franklin Templeton. It trades about 0.17 of its potential returns per unit of risk. Franklin Templeton Smacs is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 938.00 in Franklin Templeton Smacs on September 1, 2024 and sell it today you would earn a total of 13.00 from holding Franklin Templeton Smacs or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab Municipal Income vs. Franklin Templeton Smacs
Performance |
| Timeline |
| Ab Municipal Income |
| Franklin Templeton Smacs |
Ab Municipal and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Franklin Templeton
The main advantage of trading using opposite Ab Municipal and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Franklin Templeton 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 Templeton will offset losses from the drop in Franklin Templeton's long position.| Ab Municipal vs. T Rowe Price | Ab Municipal vs. Rbb Fund | Ab Municipal vs. Rbc Microcap Value | Ab Municipal vs. Fabxx |
| Franklin Templeton vs. Franklin Mutual Beacon | Franklin Templeton vs. Templeton Developing Markets | Franklin Templeton vs. Franklin Mutual Global | Franklin Templeton 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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