Correlation Between Ab Bond and Franklin Convertible
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Franklin Convertible 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 Bond and Franklin Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Franklin Vertible Securities, you can compare the effects of market volatilities on Ab Bond and Franklin Convertible 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 Bond with a short position of Franklin Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Franklin Convertible.
Diversification Opportunities for Ab Bond and Franklin Convertible
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABNTX and Franklin is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Franklin Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Convertible and Ab Bond 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 Bond Inflation are associated (or correlated) with Franklin Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Convertible has no effect on the direction of Ab Bond i.e., Ab Bond and Franklin Convertible go up and down completely randomly.
Pair Corralation between Ab Bond and Franklin Convertible
Assuming the 90 days horizon Ab Bond Inflation is expected to under-perform the Franklin Convertible. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ab Bond Inflation is 3.44 times less risky than Franklin Convertible. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Franklin Vertible Securities is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,289 in Franklin Vertible Securities on October 8, 2024 and sell it today you would earn a total of 60.00 from holding Franklin Vertible Securities or generate 2.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ab Bond Inflation vs. Franklin Vertible Securities
Performance |
Timeline |
Ab Bond Inflation |
Franklin Convertible |
Ab Bond and Franklin Convertible Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ab Bond and Franklin Convertible
The main advantage of trading using opposite Ab Bond and Franklin Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Franklin Convertible 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 Convertible will offset losses from the drop in Franklin Convertible's long position.Ab Bond vs. Ab Large Cap | Ab Bond vs. Calvert Large Cap | Ab Bond vs. M Large Cap | Ab Bond vs. Tax Managed Large Cap |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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