Correlation Between Franklin Lifesmart and Mutual Of
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Mutual Of 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 Mutual Of 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 Mutual Of America, you can compare the effects of market volatilities on Franklin Lifesmart and Mutual Of 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 Mutual Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Mutual Of.
Diversification Opportunities for Franklin Lifesmart and Mutual Of
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Mutual is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart 2050 and Mutual Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mutual Of America 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 Mutual Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mutual Of America has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Mutual Of go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Mutual Of
Assuming the 90 days horizon Franklin Lifesmart 2050 is expected to generate 1.44 times more return on investment than Mutual Of. However, Franklin Lifesmart is 1.44 times more volatile than Mutual Of America. It trades about 0.07 of its potential returns per unit of risk. Mutual Of America is currently generating about 0.07 per unit of risk. If you would invest 1,488 in Franklin Lifesmart 2050 on August 24, 2024 and sell it today you would earn a total of 100.00 from holding Franklin Lifesmart 2050 or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart 2050 vs. Mutual Of America
Performance |
| Timeline |
| Franklin Lifesmart 2050 |
| Mutual Of America |
Franklin Lifesmart and Mutual Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Mutual Of
The main advantage of trading using opposite Franklin Lifesmart and Mutual Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Mutual Of 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 Mutual Of will offset losses from the drop in Mutual Of's long position.| Franklin Lifesmart vs. Vanguard Target Retirement | Franklin Lifesmart vs. ABIVAX Socit Anonyme | Franklin Lifesmart vs. SCOR PK | Franklin Lifesmart vs. HUMANA INC |
| Mutual Of vs. Vanguard Target Retirement | Mutual Of vs. ABIVAX Socit Anonyme | Mutual Of vs. SCOR PK | Mutual Of vs. HUMANA INC |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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