Correlation Between Franklin Lifesmart and Amg Managers
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Amg Managers 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 Amg Managers 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 Amg Managers Fairpointe, you can compare the effects of market volatilities on Franklin Lifesmart and Amg Managers 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 Amg Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Amg Managers.
Diversification Opportunities for Franklin Lifesmart and Amg Managers
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Amg is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Amg Managers Fairpointe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Fairpointe 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 Amg Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Managers Fairpointe has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Amg Managers go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Amg Managers
Assuming the 90 days horizon Franklin Lifesmart is expected to generate 2.39 times less return on investment than Amg Managers. But when comparing it to its historical volatility, Franklin Lifesmart Retirement is 2.34 times less risky than Amg Managers. It trades about 0.11 of its potential returns per unit of risk. Amg Managers Fairpointe is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,881 in Amg Managers Fairpointe on September 2, 2024 and sell it today you would earn a total of 735.00 from holding Amg Managers Fairpointe or generate 39.07% 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. Amg Managers Fairpointe
Performance |
| Timeline |
| Franklin Lifesmart |
| Amg Managers Fairpointe |
Franklin Lifesmart and Amg Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Amg Managers
The main advantage of trading using opposite Franklin Lifesmart and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Amg Managers 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 Amg Managers will offset losses from the drop in Amg Managers' long position.| Franklin Lifesmart vs. Champlain Small | Franklin Lifesmart vs. Baird Smallmid Cap | Franklin Lifesmart vs. Ab Small Cap | Franklin Lifesmart vs. The Hartford Small |
| Amg Managers vs. Victory Rs Small | Amg Managers vs. T Rowe Price | Amg Managers vs. Chase Growth Fund | Amg Managers vs. Champlain Mid Cap |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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