Correlation Between Franklin Emerging and Ab Tax-managed
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Ab Tax-managed 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 Emerging and Ab Tax-managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Emerging Market and Ab Tax Managed Wealth, you can compare the effects of market volatilities on Franklin Emerging and Ab Tax-managed 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 Emerging with a short position of Ab Tax-managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Ab Tax-managed.
Diversification Opportunities for Franklin Emerging and Ab Tax-managed
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and ATWCX is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Ab Tax Managed Wealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Tax Managed and Franklin Emerging 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 Emerging Market are associated (or correlated) with Ab Tax-managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Tax Managed has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Ab Tax-managed go up and down completely randomly.
Pair Corralation between Franklin Emerging and Ab Tax-managed
Assuming the 90 days horizon Franklin Emerging is expected to generate 1.38 times less return on investment than Ab Tax-managed. But when comparing it to its historical volatility, Franklin Emerging Market is 3.93 times less risky than Ab Tax-managed. It trades about 0.16 of its potential returns per unit of risk. Ab Tax Managed Wealth is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,198 in Ab Tax Managed Wealth on May 27, 2025 and sell it today you would earn a total of 318.00 from holding Ab Tax Managed Wealth or generate 14.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Ab Tax Managed Wealth
Performance |
| Timeline |
| Franklin Emerging Market |
| Ab Tax Managed |
Franklin Emerging and Ab Tax-managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Ab Tax-managed
The main advantage of trading using opposite Franklin Emerging and Ab Tax-managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Ab Tax-managed 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 Tax-managed will offset losses from the drop in Ab Tax-managed's long position.The idea behind Franklin Emerging Market and Ab Tax Managed Wealth 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.
| Ab Tax-managed vs. Rbc Emerging Markets | Ab Tax-managed vs. Touchstone Sands Capital | Ab Tax-managed vs. Calvert Emerging Markets | Ab Tax-managed vs. Transamerica Emerging Markets |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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