Correlation Between Rbb Fund and Franklin Lifesmart

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Can any of the company-specific risk be diversified away by investing in both Rbb Fund and Franklin Lifesmart 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 Rbb Fund and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rbb Fund and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Rbb Fund and Franklin Lifesmart 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 Rbb Fund with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbb Fund and Franklin Lifesmart.

Diversification Opportunities for Rbb Fund and Franklin Lifesmart

0.26
  Correlation Coefficient

Modest diversification

The 3 months correlation between Rbb and Franklin is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Rbb Fund and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Rbb Fund 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 Rbb Fund are associated (or correlated) with Franklin Lifesmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Lifesmart has no effect on the direction of Rbb Fund i.e., Rbb Fund and Franklin Lifesmart go up and down completely randomly.

Pair Corralation between Rbb Fund and Franklin Lifesmart

Assuming the 90 days horizon Rbb Fund is expected to generate 0.61 times more return on investment than Franklin Lifesmart. However, Rbb Fund is 1.65 times less risky than Franklin Lifesmart. It trades about 0.18 of its potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about -0.1 per unit of risk. If you would invest  953.00  in Rbb Fund on September 28, 2024 and sell it today you would earn a total of  22.00  from holding Rbb Fund or generate 2.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Rbb Fund   vs.  Franklin Lifesmart Retirement

 Performance 
       Timeline  
Rbb Fund 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Rbb Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Rbb Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Franklin Lifesmart 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Franklin Lifesmart Retirement has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Franklin Lifesmart is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rbb Fund and Franklin Lifesmart Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Rbb Fund and Franklin Lifesmart

The main advantage of trading using opposite Rbb Fund and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rbb Fund position performs unexpectedly, Franklin Lifesmart 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 Lifesmart will offset losses from the drop in Franklin Lifesmart's long position.
The idea behind Rbb Fund and Franklin Lifesmart Retirement 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.
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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