Correlation Between Franklin Lifesmart and Inverse High
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Inverse High 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 Inverse High 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 Inverse High Yield, you can compare the effects of market volatilities on Franklin Lifesmart and Inverse High 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 Inverse High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Inverse High.
Diversification Opportunities for Franklin Lifesmart and Inverse High
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Inverse is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Inverse High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse High Yield 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 Inverse High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse High Yield has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Inverse High go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Inverse High
Assuming the 90 days horizon Franklin Lifesmart is expected to generate 11.48 times less return on investment than Inverse High. In addition to that, Franklin Lifesmart is 1.01 times more volatile than Inverse High Yield. It trades about 0.01 of its total potential returns per unit of risk. Inverse High Yield is currently generating about 0.1 per unit of volatility. If you would invest 4,854 in Inverse High Yield on October 18, 2024 and sell it today you would earn a total of 132.00 from holding Inverse High Yield or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Inverse High Yield
Performance |
| Timeline |
| Franklin Lifesmart |
| Inverse High Yield |
Franklin Lifesmart and Inverse High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Inverse High
The main advantage of trading using opposite Franklin Lifesmart and Inverse High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Inverse High 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 Inverse High will offset losses from the drop in Inverse High's long position.| Franklin Lifesmart vs. The Gold Bullion | Franklin Lifesmart vs. Sprott Gold Equity | Franklin Lifesmart vs. Goldman Sachs Short | Franklin Lifesmart vs. James Balanced Golden |
| Inverse High vs. Franklin Lifesmart Retirement | Inverse High vs. Lifestyle Ii Moderate | Inverse High vs. Tiaa Cref Lifestyle Moderate | Inverse High vs. College Retirement Equities |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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