Correlation Between Ab Pennsylvania and Franklin FTSE

Can any of the company-specific risk be diversified away by investing in both Ab Pennsylvania and Franklin FTSE 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 Pennsylvania and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Pennsylvania Portfolio and Franklin FTSE South, you can compare the effects of market volatilities on Ab Pennsylvania and Franklin FTSE 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 Pennsylvania with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Pennsylvania and Franklin FTSE.

Diversification Opportunities for Ab Pennsylvania and Franklin FTSE

0.33

Correlation Coefficient

Ab Pennsylvania  Franklin FTSE

Weak diversification

The 3 months correlation between APAAX and Franklin is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ab Pennsylvania Portfolio and Franklin FTSE South in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE South and Ab Pennsylvania 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 Pennsylvania Portfolio are associated (or correlated) with Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE South has no effect on the direction of Ab Pennsylvania i.e., Ab Pennsylvania and Franklin FTSE go up and down completely randomly.

Pair Corralation between Ab Pennsylvania and Franklin FTSE

Assuming the 90 days horizon Ab Pennsylvania Portfolio is expected to generate 0.18 times more return on investment than Franklin FTSE. However, Ab Pennsylvania Portfolio is 5.71 times less risky than Franklin FTSE. It trades about 0.19 of its potential returns per unit of risk. Franklin FTSE South is currently generating about -0.09 per unit of risk. If you would invest  974.00  in Ab Pennsylvania Portfolio on September 1, 2024 and sell it today you would earn a total of  10.00  from holding Ab Pennsylvania Portfolio or generate 1.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Ab Pennsylvania Portfolio  vs.  Franklin FTSE South

Ab Pennsylvania Portfolio

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Pennsylvania Portfolio are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ab Pennsylvania is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Franklin FTSE South

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin FTSE South has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Etf's forward-looking signals remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with Ab Pennsylvania and Franklin FTSE

The main advantage of trading using opposite Ab Pennsylvania and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Pennsylvania position performs unexpectedly, Franklin FTSE 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 FTSE will offset losses from the drop in Franklin FTSE's long position.

The idea behind Ab Pennsylvania Portfolio and Franklin FTSE South pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.