Correlation Between Franklin Lifesmart and Gamco Global
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Gamco Global 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 Gamco Global 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 Gamco Global Telecommunications, you can compare the effects of market volatilities on Franklin Lifesmart and Gamco Global 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 Gamco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Gamco Global.
Diversification Opportunities for Franklin Lifesmart and Gamco Global
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and GAMCO is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Gamco Global Telecommunication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Global Telecom 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 Gamco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco Global Telecom has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Gamco Global go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Gamco Global
Assuming the 90 days horizon Franklin Lifesmart is expected to generate 2.46 times less return on investment than Gamco Global. But when comparing it to its historical volatility, Franklin Lifesmart Retirement is 2.34 times less risky than Gamco Global. It trades about 0.1 of its potential returns per unit of risk. Gamco Global Telecommunications is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,548 in Gamco Global Telecommunications on August 31, 2024 and sell it today you would earn a total of 794.00 from holding Gamco Global Telecommunications or generate 51.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Gamco Global Telecommunication
Performance |
| Timeline |
| Franklin Lifesmart |
| Gamco Global Telecom |
Franklin Lifesmart and Gamco Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Gamco Global
The main advantage of trading using opposite Franklin Lifesmart and Gamco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Gamco Global 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 Gamco Global will offset losses from the drop in Gamco Global's long position.| Franklin Lifesmart vs. Vanguard Target Retirement | Franklin Lifesmart vs. Jpmorgan Smartretirement Income | Franklin Lifesmart vs. HUMANA INC | Franklin Lifesmart vs. Aquagold International |
| Gamco Global vs. Pro Blend Moderate Term | Gamco Global vs. Franklin Lifesmart Retirement | Gamco Global vs. Dimensional Retirement Income | Gamco Global vs. American Funds Retirement |
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 CEOs Directory module to screen CEOs from public companies around the world.
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