Correlation Between Blackrock Moderate and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Blackrock Moderate 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 Blackrock Moderate and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Moderate Prepared and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Blackrock Moderate 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 Blackrock Moderate with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Moderate and Franklin Lifesmart.
Diversification Opportunities for Blackrock Moderate and Franklin Lifesmart
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Blackrock and FRANKLIN is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Moderate Prepared and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Blackrock Moderate 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 Blackrock Moderate Prepared 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 Blackrock Moderate i.e., Blackrock Moderate and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Blackrock Moderate and Franklin Lifesmart
Assuming the 90 days horizon Blackrock Moderate is expected to generate 1.19 times less return on investment than Franklin Lifesmart. In addition to that, Blackrock Moderate is 1.25 times more volatile than Franklin Lifesmart Retirement. It trades about 0.1 of its total potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.15 per unit of volatility. If you would invest 1,057 in Franklin Lifesmart Retirement on September 2, 2024 and sell it today you would earn a total of 28.00 from holding Franklin Lifesmart Retirement or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Moderate Prepared vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Blackrock Moderate |
| Franklin Lifesmart |
Blackrock Moderate and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Moderate and Franklin Lifesmart
The main advantage of trading using opposite Blackrock Moderate and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Moderate 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.| Blackrock Moderate vs. Blackrock California Municipal | Blackrock Moderate vs. Blackrock Balanced Capital | Blackrock Moderate vs. Blackrock Eurofund Class | Blackrock Moderate vs. Blackrock Funds |
| Franklin Lifesmart vs. Maryland Short Term Tax Free | Franklin Lifesmart vs. Barings Active Short | Franklin Lifesmart vs. Touchstone Ultra Short | Franklin Lifesmart vs. Goldman Sachs Short Term |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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