Correlation Between Franklin Lifesmart and Fidelity Sai
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Fidelity Sai 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 Fidelity Sai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Lifesmart 2050 and Fidelity Sai Convertible, you can compare the effects of market volatilities on Franklin Lifesmart and Fidelity Sai 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 Fidelity Sai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Fidelity Sai.
Diversification Opportunities for Franklin Lifesmart and Fidelity Sai
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Fidelity is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart 2050 and Fidelity Sai Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Convertible 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 2050 are associated (or correlated) with Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Convertible has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Fidelity Sai go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Fidelity Sai
Assuming the 90 days horizon Franklin Lifesmart is expected to generate 4.0 times less return on investment than Fidelity Sai. In addition to that, Franklin Lifesmart is 4.05 times more volatile than Fidelity Sai Convertible. It trades about 0.02 of its total potential returns per unit of risk. Fidelity Sai Convertible is currently generating about 0.36 per unit of volatility. If you would invest 1,090 in Fidelity Sai Convertible on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Fidelity Sai Convertible or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart 2050 vs. Fidelity Sai Convertible
Performance |
| Timeline |
| Franklin Lifesmart 2050 |
| Fidelity Sai Convertible |
Franklin Lifesmart and Fidelity Sai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Fidelity Sai
The main advantage of trading using opposite Franklin Lifesmart and Fidelity Sai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Fidelity Sai 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 Fidelity Sai will offset losses from the drop in Fidelity Sai's long position.| Franklin Lifesmart vs. Pace High Yield | Franklin Lifesmart vs. Metropolitan West High | Franklin Lifesmart vs. Calvert High Yield | Franklin Lifesmart vs. Ab Global Risk |
| Fidelity Sai vs. American Funds Inflation | Fidelity Sai vs. Ab Bond Inflation | Fidelity Sai vs. Blackrock Inflation Protected | Fidelity Sai vs. Lord Abbett Inflation |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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