Correlation Between Franklin Lifesmart and Usa Mutuals
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Usa Mutuals 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 Lifesmart and Usa Mutuals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Lifesmart Retirement and Usa Mutuals Navigator, you can compare the effects of market volatilities on Franklin Lifesmart and Usa Mutuals 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 Lifesmart with a short position of Usa Mutuals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Usa Mutuals.
Diversification Opportunities for Franklin Lifesmart and Usa Mutuals
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Usa is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Usa Mutuals Navigator in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usa Mutuals Navigator and Franklin Lifesmart 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 Lifesmart Retirement are associated (or correlated) with Usa Mutuals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usa Mutuals Navigator has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Usa Mutuals go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Usa Mutuals
Assuming the 90 days horizon Franklin Lifesmart Retirement is expected to generate 0.74 times more return on investment than Usa Mutuals. However, Franklin Lifesmart Retirement is 1.35 times less risky than Usa Mutuals. It trades about -0.07 of its potential returns per unit of risk. Usa Mutuals Navigator is currently generating about -0.06 per unit of risk. If you would invest 1,062 in Franklin Lifesmart Retirement on September 24, 2024 and sell it today you would lose (15.00) from holding Franklin Lifesmart Retirement or give up 1.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Lifesmart Retirement vs. Usa Mutuals Navigator
Performance |
Timeline |
Franklin Lifesmart |
Usa Mutuals Navigator |
Franklin Lifesmart and Usa Mutuals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Lifesmart and Usa Mutuals
The main advantage of trading using opposite Franklin Lifesmart and Usa Mutuals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Usa Mutuals 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 Usa Mutuals will offset losses from the drop in Usa Mutuals' long position.Franklin Lifesmart vs. Franklin Mutual Beacon | Franklin Lifesmart vs. Templeton Developing Markets | Franklin Lifesmart vs. Franklin Mutual Global | Franklin Lifesmart vs. Franklin Mutual Global |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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