Correlation Between Franklin Natural and Mfs Lifetime
Can any of the company-specific risk be diversified away by investing in both Franklin Natural and Mfs Lifetime 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 Natural and Mfs Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Natural Resources and Mfs Lifetime 2065, you can compare the effects of market volatilities on Franklin Natural and Mfs Lifetime 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 Natural with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Mfs Lifetime.
Diversification Opportunities for Franklin Natural and Mfs Lifetime
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FRANKLIN and Mfs is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and Mfs Lifetime 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Lifetime 2065 and Franklin Natural 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 Natural Resources are associated (or correlated) with Mfs Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Lifetime 2065 has no effect on the direction of Franklin Natural i.e., Franklin Natural and Mfs Lifetime go up and down completely randomly.
Pair Corralation between Franklin Natural and Mfs Lifetime
Assuming the 90 days horizon Franklin Natural Resources is expected to generate 1.39 times more return on investment than Mfs Lifetime. However, Franklin Natural is 1.39 times more volatile than Mfs Lifetime 2065. It trades about 0.25 of its potential returns per unit of risk. Mfs Lifetime 2065 is currently generating about 0.14 per unit of risk. If you would invest 3,069 in Franklin Natural Resources on August 28, 2024 and sell it today you would earn a total of 146.00 from holding Franklin Natural Resources or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Natural Resources vs. Mfs Lifetime 2065
Performance |
| Timeline |
| Franklin Natural Res |
| Mfs Lifetime 2065 |
Franklin Natural and Mfs Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Mfs Lifetime
The main advantage of trading using opposite Franklin Natural and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural position performs unexpectedly, Mfs Lifetime 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 Mfs Lifetime will offset losses from the drop in Mfs Lifetime's long position.| Franklin Natural vs. T Rowe Price | Franklin Natural vs. Pioneer High Income | Franklin Natural vs. Artisan High Income | Franklin Natural vs. Alliancebernstein Global High |
| Mfs Lifetime vs. Mfs Prudent Investor | Mfs Lifetime vs. Mfs Prudent Investor | Mfs Lifetime vs. Mfs Prudent Investor | Mfs Lifetime vs. Mfs Prudent Investor |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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