Correlation Between Franklin Mutual and Ab Global
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Ab Global 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 Franklin Mutual and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual Global and Ab Global Real, you can compare the effects of market volatilities on Franklin Mutual and Ab Global 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 Franklin Mutual with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Ab Global.
Diversification Opportunities for Franklin Mutual and Ab Global
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and AEEIX is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Ab Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Real and Franklin Mutual 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 Franklin Mutual Global are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Real has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Ab Global go up and down completely randomly.
Pair Corralation between Franklin Mutual and Ab Global
Assuming the 90 days horizon Franklin Mutual is expected to generate 1.27 times less return on investment than Ab Global. But when comparing it to its historical volatility, Franklin Mutual Global is 1.33 times less risky than Ab Global. It trades about 0.05 of its potential returns per unit of risk. Ab Global Real is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,297 in Ab Global Real on September 4, 2024 and sell it today you would earn a total of 240.00 from holding Ab Global Real or generate 18.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Global vs. Ab Global Real
Performance |
| Timeline |
| Franklin Mutual Global |
| Ab Global Real |
Franklin Mutual and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Ab Global
The main advantage of trading using opposite Franklin Mutual and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.| Franklin Mutual vs. Franklin Mutual Beacon | Franklin Mutual vs. Templeton Developing Markets | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Global |
| Ab Global vs. Us Government Securities | Ab Global vs. Us Government Securities | Ab Global vs. Prudential Government Income | Ab Global vs. Dunham Porategovernment Bond |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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