Correlation Between Franklin Lifesmart and Blackrock Moderate
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Blackrock Moderate 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 Franklin Lifesmart and Blackrock Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Lifesmart Retirement and Blackrock Moderate Prepared, you can compare the effects of market volatilities on Franklin Lifesmart and Blackrock Moderate 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 Franklin Lifesmart with a short position of Blackrock Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Blackrock Moderate.
Diversification Opportunities for Franklin Lifesmart and Blackrock Moderate
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FRANKLIN and Blackrock is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Blackrock Moderate Prepared in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Moderate and Franklin Lifesmart 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 Franklin Lifesmart Retirement are associated (or correlated) with Blackrock Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Moderate has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Blackrock Moderate go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Blackrock Moderate
Assuming the 90 days horizon Franklin Lifesmart Retirement is expected to generate 0.8 times more return on investment than Blackrock Moderate. However, Franklin Lifesmart Retirement is 1.25 times less risky than Blackrock Moderate. It trades about 0.15 of its potential returns per unit of risk. Blackrock Moderate Prepared is currently generating about 0.1 per unit of risk. 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 |
Franklin Lifesmart Retirement vs. Blackrock Moderate Prepared
Performance |
| Timeline |
| Franklin Lifesmart |
| Blackrock Moderate |
Franklin Lifesmart and Blackrock Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Blackrock Moderate
The main advantage of trading using opposite Franklin Lifesmart and Blackrock Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Blackrock Moderate 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 Blackrock Moderate will offset losses from the drop in Blackrock Moderate's long position.| 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 |
| Blackrock Moderate vs. Blackrock California Municipal | Blackrock Moderate vs. Blackrock Balanced Capital | Blackrock Moderate vs. Blackrock Eurofund Class | Blackrock Moderate vs. Blackrock Funds |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |