Correlation Between Rbb Fund and Franklin Lifesmart
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Rbb Fund vs. Franklin Lifesmart Retirement
Performance |
Timeline |
Rbb Fund |
Franklin Lifesmart |
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.Rbb Fund vs. Western Asset Diversified | Rbb Fund vs. Ashmore Emerging Markets | Rbb Fund vs. Transamerica Emerging Markets |
Franklin Lifesmart vs. Franklin Mutual Beacon | Franklin Lifesmart vs. Templeton Developing Markets | Franklin Lifesmart vs. Franklin Mutual Global | Franklin Lifesmart vs. Franklin Mutual Global |
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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