Correlation Between Gold Portfolio and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Gold Portfolio 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 Gold Portfolio and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Portfolio Fidelity and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Gold Portfolio 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 Gold Portfolio with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Portfolio and Franklin Lifesmart.
Diversification Opportunities for Gold Portfolio and Franklin Lifesmart
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GOLD and Franklin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Gold Portfolio Fidelity and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Gold Portfolio 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 Gold Portfolio Fidelity 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 Gold Portfolio i.e., Gold Portfolio and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Gold Portfolio and Franklin Lifesmart
Assuming the 90 days horizon Gold Portfolio Fidelity is expected to under-perform the Franklin Lifesmart. In addition to that, Gold Portfolio is 4.93 times more volatile than Franklin Lifesmart Retirement. It trades about -0.07 of its total potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.06 per unit of volatility. If you would invest 1,053 in Franklin Lifesmart Retirement on October 24, 2024 and sell it today you would earn a total of 14.00 from holding Franklin Lifesmart Retirement or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Portfolio Fidelity vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Gold Portfolio Fidelity |
| Franklin Lifesmart |
Gold Portfolio and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Portfolio and Franklin Lifesmart
The main advantage of trading using opposite Gold Portfolio and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Portfolio 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.| Gold Portfolio vs. Lsv Small Cap | Gold Portfolio vs. Small Cap Growth Profund | Gold Portfolio vs. Queens Road Small | Gold Portfolio vs. Mid Cap Value Profund |
| Franklin Lifesmart vs. Invesco Gold Special | Franklin Lifesmart vs. Short Precious Metals | Franklin Lifesmart vs. Gold Portfolio Fidelity | Franklin Lifesmart vs. First Eagle Gold |
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 Correlations module to find global opportunities by holding instruments from different markets.
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