Correlation Between Fidelity Small and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Fidelity Small 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 Fidelity Small and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Small Cap and Franklin Lifesmart 2055, you can compare the effects of market volatilities on Fidelity Small 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 Fidelity Small with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Franklin Lifesmart.
Diversification Opportunities for Fidelity Small and Franklin Lifesmart
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Franklin is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Franklin Lifesmart 2055 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2055 and Fidelity Small 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 Fidelity Small Cap 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 2055 has no effect on the direction of Fidelity Small i.e., Fidelity Small and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Fidelity Small and Franklin Lifesmart
Assuming the 90 days horizon Fidelity Small Cap is expected to under-perform the Franklin Lifesmart. In addition to that, Fidelity Small is 2.08 times more volatile than Franklin Lifesmart 2055. It trades about -0.12 of its total potential returns per unit of risk. Franklin Lifesmart 2055 is currently generating about 0.02 per unit of volatility. If you would invest 1,402 in Franklin Lifesmart 2055 on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Franklin Lifesmart 2055 or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Franklin Lifesmart 2055
Performance |
| Timeline |
| Fidelity Small Cap |
| Franklin Lifesmart 2055 |
Fidelity Small and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Franklin Lifesmart
The main advantage of trading using opposite Fidelity Small and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small 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.| Fidelity Small vs. Fidelity Large Cap | Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Mid Cap | Fidelity Small vs. Fidelity Mid Cap |
| Franklin Lifesmart vs. Lsv Small Cap | Franklin Lifesmart vs. Pace Smallmedium Value | Franklin Lifesmart vs. Heartland Value Plus | Franklin Lifesmart vs. Boston Partners Small |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |