Correlation Between Franklin Lifesmart and Victory Integrity
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Victory Integrity 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 Victory Integrity 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 Victory Integrity Small Cap, you can compare the effects of market volatilities on Franklin Lifesmart and Victory Integrity 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 Victory Integrity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Victory Integrity.
Diversification Opportunities for Franklin Lifesmart and Victory Integrity
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Victory is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Victory Integrity Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Integrity Small 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 Victory Integrity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Integrity Small has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Victory Integrity go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Victory Integrity
Assuming the 90 days horizon Franklin Lifesmart is expected to generate 1.07 times less return on investment than Victory Integrity. But when comparing it to its historical volatility, Franklin Lifesmart Retirement is 3.39 times less risky than Victory Integrity. It trades about 0.1 of its potential returns per unit of risk. Victory Integrity Small Cap is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,427 in Victory Integrity Small Cap on September 3, 2024 and sell it today you would earn a total of 581.00 from holding Victory Integrity Small Cap or generate 16.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Victory Integrity Small Cap
Performance |
| Timeline |
| Franklin Lifesmart |
| Victory Integrity Small |
Franklin Lifesmart and Victory Integrity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Victory Integrity
The main advantage of trading using opposite Franklin Lifesmart and Victory Integrity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Victory Integrity 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 Victory Integrity will offset losses from the drop in Victory Integrity's long position.| Franklin Lifesmart vs. Health Biotchnology Portfolio | Franklin Lifesmart vs. Baillie Gifford Health | Franklin Lifesmart vs. Eventide Healthcare Life | Franklin Lifesmart vs. Health Biotchnology Portfolio |
| Victory Integrity vs. Vanguard Small Cap Value | Victory Integrity vs. Vanguard Small Cap Value | Victory Integrity vs. Us Small Cap | Victory Integrity vs. Us Targeted Value |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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