Correlation Between Chartwell Short and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Chartwell Short 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 Chartwell Short and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chartwell Short Duration and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Chartwell Short 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 Chartwell Short with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chartwell Short and Franklin Lifesmart.
Diversification Opportunities for Chartwell Short and Franklin Lifesmart
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CHARTWELL and Franklin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Chartwell Short Duration and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Chartwell Short 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 Chartwell Short Duration 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 Chartwell Short i.e., Chartwell Short and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Chartwell Short and Franklin Lifesmart
Assuming the 90 days horizon Chartwell Short is expected to generate 2.92 times less return on investment than Franklin Lifesmart. But when comparing it to its historical volatility, Chartwell Short Duration is 3.52 times less risky than Franklin Lifesmart. It trades about 0.31 of its potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,038 in Franklin Lifesmart Retirement on November 18, 2024 and sell it today you would earn a total of 16.00 from holding Franklin Lifesmart Retirement or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chartwell Short Duration vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Chartwell Short Duration |
| Franklin Lifesmart |
Chartwell Short and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chartwell Short and Franklin Lifesmart
The main advantage of trading using opposite Chartwell Short and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chartwell Short 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.| Chartwell Short vs. Lifestyle Ii Moderate | Chartwell Short vs. Multimanager Lifestyle Moderate | Chartwell Short vs. College Retirement Equities | Chartwell Short vs. Tiaa Cref Lifestyle Moderate |
| Franklin Lifesmart vs. Dimensional Retirement Income | Franklin Lifesmart vs. Putnam Retirement Advantage | Franklin Lifesmart vs. Retirement Living Through | Franklin Lifesmart vs. Putnman Retirement Ready |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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