Correlation Between Thrivent Diversified and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Thrivent Diversified 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 Thrivent Diversified and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thrivent Diversified Income and Franklin Lifesmart 2050, you can compare the effects of market volatilities on Thrivent Diversified 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 Thrivent Diversified with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Diversified and Franklin Lifesmart.
Diversification Opportunities for Thrivent Diversified and Franklin Lifesmart
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Thrivent and Franklin is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Diversified Income and Franklin Lifesmart 2050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2050 and Thrivent Diversified 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 Thrivent Diversified Income 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 2050 has no effect on the direction of Thrivent Diversified i.e., Thrivent Diversified and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Thrivent Diversified and Franklin Lifesmart
Assuming the 90 days horizon Thrivent Diversified Income is expected to generate 0.34 times more return on investment than Franklin Lifesmart. However, Thrivent Diversified Income is 2.92 times less risky than Franklin Lifesmart. It trades about -0.35 of its potential returns per unit of risk. Franklin Lifesmart 2050 is currently generating about -0.23 per unit of risk. If you would invest 723.00 in Thrivent Diversified Income on October 10, 2024 and sell it today you would lose (15.00) from holding Thrivent Diversified Income or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Thrivent Diversified Income vs. Franklin Lifesmart 2050
Performance |
| Timeline |
| Thrivent Diversified |
| Franklin Lifesmart 2050 |
Thrivent Diversified and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent Diversified and Franklin Lifesmart
The main advantage of trading using opposite Thrivent Diversified and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Diversified 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.| Thrivent Diversified vs. Quantitative Longshort Equity | Thrivent Diversified vs. Us Vector Equity | Thrivent Diversified vs. Locorr Dynamic Equity | Thrivent Diversified vs. Aqr Long Short Equity |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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