Correlation Between Atac Inflation and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Atac Inflation 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 Atac Inflation and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atac Inflation Rotation and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Atac Inflation 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 Atac Inflation with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atac Inflation and Franklin Lifesmart.
Diversification Opportunities for Atac Inflation and Franklin Lifesmart
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atac and Franklin is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Atac Inflation Rotation and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Atac Inflation 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 Atac Inflation Rotation 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 Atac Inflation i.e., Atac Inflation and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Atac Inflation and Franklin Lifesmart
Assuming the 90 days horizon Atac Inflation Rotation is expected to generate 1.67 times more return on investment than Franklin Lifesmart. However, Atac Inflation is 1.67 times more volatile than Franklin Lifesmart Retirement. It trades about 0.14 of its potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.19 per unit of risk. If you would invest 3,229 in Atac Inflation Rotation on November 2, 2024 and sell it today you would earn a total of 57.00 from holding Atac Inflation Rotation or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Atac Inflation Rotation vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Atac Inflation Rotation |
| Franklin Lifesmart |
Atac Inflation and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atac Inflation and Franklin Lifesmart
The main advantage of trading using opposite Atac Inflation and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atac Inflation 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.| Atac Inflation vs. ATAC Rotation ETF | Atac Inflation vs. Tidal ETF Trust | Atac Inflation vs. Quadratic Interest Rate | Atac Inflation vs. Baron Global Advantage |
| 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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