Correlation Between Ambrus Core and Franklin New
Can any of the company-specific risk be diversified away by investing in both Ambrus Core and Franklin New 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 Ambrus Core and Franklin New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambrus Core Bond and Franklin New Jersey, you can compare the effects of market volatilities on Ambrus Core and Franklin New 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 Ambrus Core with a short position of Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambrus Core and Franklin New.
Diversification Opportunities for Ambrus Core and Franklin New
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ambrus and Franklin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ambrus Core Bond and Franklin New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New Jersey and Ambrus Core 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 Ambrus Core Bond are associated (or correlated) with Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New Jersey has no effect on the direction of Ambrus Core i.e., Ambrus Core and Franklin New go up and down completely randomly.
Pair Corralation between Ambrus Core and Franklin New
Assuming the 90 days horizon Ambrus Core is expected to generate 6.79 times less return on investment than Franklin New. But when comparing it to its historical volatility, Ambrus Core Bond is 1.59 times less risky than Franklin New. It trades about 0.05 of its potential returns per unit of risk. Franklin New Jersey is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,033 in Franklin New Jersey on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Franklin New Jersey or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ambrus Core Bond vs. Franklin New Jersey
Performance |
| Timeline |
| Ambrus Core Bond |
| Franklin New Jersey |
Ambrus Core and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambrus Core and Franklin New
The main advantage of trading using opposite Ambrus Core and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambrus Core position performs unexpectedly, Franklin New 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 New will offset losses from the drop in Franklin New's long position.| Ambrus Core vs. Harbor Diversified International | Ambrus Core vs. Adams Diversified Equity | Ambrus Core vs. Western Asset Diversified | Ambrus Core vs. Fidelity Advisor Diversified |
| Franklin New vs. Franklin Mutual Beacon | Franklin New vs. Templeton Developing Markets | Franklin New vs. Franklin Mutual Global | Franklin New 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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