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 Momentum, 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
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Fidelity is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart 2050 and Fidelity Sai Momentum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Momentum 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 Momentum 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 4.3 times less return on investment than Fidelity Sai. But when comparing it to its historical volatility, Franklin Lifesmart 2050 is 1.17 times less risky than Fidelity Sai. It trades about 0.04 of its potential returns per unit of risk. Fidelity Sai Momentum is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,694 in Fidelity Sai Momentum on October 22, 2024 and sell it today you would earn a total of 40.00 from holding Fidelity Sai Momentum or generate 2.36% 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 2050 vs. Fidelity Sai Momentum
Performance |
| Timeline |
| Franklin Lifesmart 2050 |
| Fidelity Sai Momentum |
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. Gmo High Yield | Franklin Lifesmart vs. Ab High Income | Franklin Lifesmart vs. Dunham High Yield |
| Fidelity Sai vs. Arrow Managed Futures | Fidelity Sai vs. Atac Inflation Rotation | Fidelity Sai vs. Guidepath Managed Futures | Fidelity Sai vs. T Rowe Price |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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