Correlation Between ATT and Franklin Liberty
Can any of the company-specific risk be diversified away by investing in both ATT and Franklin Liberty 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 ATT and Franklin Liberty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Franklin Liberty Ultra, you can compare the effects of market volatilities on ATT and Franklin Liberty 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 ATT with a short position of Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Franklin Liberty.
Diversification Opportunities for ATT and Franklin Liberty
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ATT and Franklin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Franklin Liberty Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Ultra and ATT 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 ATT Inc are associated (or correlated) with Franklin Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Liberty Ultra has no effect on the direction of ATT i.e., ATT and Franklin Liberty go up and down completely randomly.
Pair Corralation between ATT and Franklin Liberty
Taking into account the 90-day investment horizon ATT Inc is expected to generate 5.18 times more return on investment than Franklin Liberty. However, ATT is 5.18 times more volatile than Franklin Liberty Ultra. It trades about 0.33 of its potential returns per unit of risk. Franklin Liberty Ultra is currently generating about 0.11 per unit of risk. If you would invest 2,192 in ATT Inc on September 3, 2024 and sell it today you would earn a total of 124.00 from holding ATT Inc or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Franklin Liberty Ultra
Performance |
| Timeline |
| ATT Inc |
| Franklin Liberty Ultra |
ATT and Franklin Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Franklin Liberty
The main advantage of trading using opposite ATT and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Franklin Liberty 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 Liberty will offset losses from the drop in Franklin Liberty's long position.| ATT vs. Highway Holdings Limited | ATT vs. QCR Holdings | ATT vs. Partner Communications | ATT vs. Acumen Pharmaceuticals |
| Franklin Liberty vs. Valued Advisers Trust | Franklin Liberty vs. Columbia Diversified Fixed | Franklin Liberty vs. Principal Exchange Traded Funds | Franklin Liberty vs. Doubleline Etf Trust |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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