Correlation Between Alliancebernstein and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein 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 Alliancebernstein and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliancebernstein National Municipal and Franklin Lifesmart 2060, you can compare the effects of market volatilities on Alliancebernstein 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 Alliancebernstein with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Franklin Lifesmart.
Diversification Opportunities for Alliancebernstein and Franklin Lifesmart
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alliancebernstein and Franklin is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Franklin Lifesmart 2060 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2060 and Alliancebernstein 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 Alliancebernstein National Municipal 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 2060 has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Alliancebernstein and Franklin Lifesmart
Considering the 90-day investment horizon Alliancebernstein National Municipal is expected to generate 1.33 times more return on investment than Franklin Lifesmart. However, Alliancebernstein is 1.33 times more volatile than Franklin Lifesmart 2060. It trades about 0.24 of its potential returns per unit of risk. Franklin Lifesmart 2060 is currently generating about 0.11 per unit of risk. If you would invest 1,121 in Alliancebernstein National Municipal on September 13, 2024 and sell it today you would earn a total of 30.00 from holding Alliancebernstein National Municipal or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliancebernstein National Mun vs. Franklin Lifesmart 2060
Performance |
| Timeline |
| Alliancebernstein |
| Franklin Lifesmart 2060 |
Alliancebernstein and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Franklin Lifesmart
The main advantage of trading using opposite Alliancebernstein and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein 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.| Alliancebernstein vs. Eaton Vance Short | Alliancebernstein vs. Allianzgi Diversified Income | Alliancebernstein vs. Ares Dynamic Credit | Alliancebernstein vs. DWS Municipal Income |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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