Correlation Between Gmo High and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Gmo High and Franklin Lifesmart 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 Gmo High and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo High Yield and Franklin Lifesmart 2025, you can compare the effects of market volatilities on Gmo High and Franklin Lifesmart 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 Gmo High with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Franklin Lifesmart.
Diversification Opportunities for Gmo High and Franklin Lifesmart
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gmo and Franklin is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Franklin Lifesmart 2025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2025 and Gmo High 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 Gmo High Yield are associated (or correlated) with Franklin Lifesmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Lifesmart 2025 has no effect on the direction of Gmo High i.e., Gmo High and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Gmo High and Franklin Lifesmart
Assuming the 90 days horizon Gmo High Yield is expected to generate 0.54 times more return on investment than Franklin Lifesmart. However, Gmo High Yield is 1.84 times less risky than Franklin Lifesmart. It trades about 0.11 of its potential returns per unit of risk. Franklin Lifesmart 2025 is currently generating about 0.05 per unit of risk. If you would invest 1,424 in Gmo High Yield on January 10, 2025 and sell it today you would earn a total of 241.00 from holding Gmo High Yield or generate 16.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Gmo High Yield vs. Franklin Lifesmart 2025
Performance |
| Timeline |
| Gmo High Yield |
| Franklin Lifesmart 2025 |
Gmo High and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Franklin Lifesmart
The main advantage of trading using opposite Gmo High and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Franklin Lifesmart 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 Franklin Lifesmart will offset losses from the drop in Franklin Lifesmart's long position.| Gmo High vs. Mesirow Financial Small | Gmo High vs. Vanguard Financials Index | Gmo High vs. Fidelity Advisor Financial | Gmo High vs. Davis Financial Fund |
| Franklin Lifesmart vs. Franklin Government Money | Franklin Lifesmart vs. Rbc Money Market | Franklin Lifesmart vs. John Hancock Money | Franklin Lifesmart vs. Vanguard Money Market |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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