Correlation Between Ab Small and Franklin Income
Can any of the company-specific risk be diversified away by investing in both Ab Small and Franklin Income 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 Small and Franklin Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Franklin Income Fund, you can compare the effects of market volatilities on Ab Small and Franklin Income 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 Small with a short position of Franklin Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Franklin Income.
Diversification Opportunities for Ab Small and Franklin Income
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SCYVX and Franklin is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Franklin Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Income and Ab Small 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 Small Cap are associated (or correlated) with Franklin Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Income has no effect on the direction of Ab Small i.e., Ab Small and Franklin Income go up and down completely randomly.
Pair Corralation between Ab Small and Franklin Income
Assuming the 90 days horizon Ab Small Cap is expected to generate 3.99 times more return on investment than Franklin Income. However, Ab Small is 3.99 times more volatile than Franklin Income Fund. It trades about 0.1 of its potential returns per unit of risk. Franklin Income Fund is currently generating about 0.15 per unit of risk. If you would invest 1,395 in Ab Small Cap on September 3, 2024 and sell it today you would earn a total of 245.00 from holding Ab Small Cap or generate 17.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. Franklin Income Fund
Performance |
| Timeline |
| Ab Small Cap |
| Franklin Income |
Ab Small and Franklin Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Franklin Income
The main advantage of trading using opposite Ab Small and Franklin Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small position performs unexpectedly, Franklin Income 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 Income will offset losses from the drop in Franklin Income's long position.| Ab Small vs. California Bond Fund | Ab Small vs. Limited Term Tax | Ab Small vs. Touchstone Premium Yield | Ab Small vs. Multisector Bond Sma |
| Franklin Income vs. Growth Strategy Fund | Franklin Income vs. Ab Small Cap | Franklin Income vs. Artisan Thematic Fund | Franklin Income vs. Qs Growth Fund |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |