Correlation Between Calvert Responsible and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Calvert Responsible 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 Calvert Responsible and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Responsible Index and Franklin Lifesmart 2050, you can compare the effects of market volatilities on Calvert Responsible 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 Calvert Responsible with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Responsible and Franklin Lifesmart.
Diversification Opportunities for Calvert Responsible and Franklin Lifesmart
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Calvert and FRANKLIN is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Responsible Index 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 Calvert Responsible 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 Calvert Responsible Index 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 Calvert Responsible i.e., Calvert Responsible and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Calvert Responsible and Franklin Lifesmart
Assuming the 90 days horizon Calvert Responsible Index is expected to generate 0.95 times more return on investment than Franklin Lifesmart. However, Calvert Responsible Index is 1.05 times less risky than Franklin Lifesmart. It trades about 0.33 of its potential returns per unit of risk. Franklin Lifesmart 2050 is currently generating about 0.28 per unit of risk. If you would invest 2,740 in Calvert Responsible Index on September 3, 2024 and sell it today you would earn a total of 101.00 from holding Calvert Responsible Index or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Responsible Index vs. Franklin Lifesmart 2050
Performance |
| Timeline |
| Calvert Responsible Index |
| Franklin Lifesmart 2050 |
Calvert Responsible and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Responsible and Franklin Lifesmart
The main advantage of trading using opposite Calvert Responsible and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Responsible 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.| Calvert Responsible vs. Franklin Lifesmart 2050 | Calvert Responsible vs. T Rowe Price | Calvert Responsible vs. T Rowe Price | Calvert Responsible vs. T Rowe Price |
| Franklin Lifesmart vs. Vanguard Target Retirement | Franklin Lifesmart vs. American Funds 2050 | Franklin Lifesmart vs. American Funds 2050 | Franklin Lifesmart vs. American Funds 2050 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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