Correlation Between Gabelli Value and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Gabelli Value 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 Gabelli Value and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Value and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Gabelli Value 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 Gabelli Value with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Value and Franklin Lifesmart.
Diversification Opportunities for Gabelli Value and Franklin Lifesmart
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gabelli and Franklin is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Value and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Gabelli Value 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 The Gabelli Value 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 has no effect on the direction of Gabelli Value i.e., Gabelli Value and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Gabelli Value and Franklin Lifesmart
Assuming the 90 days horizon The Gabelli Value is expected to generate 2.86 times more return on investment than Franklin Lifesmart. However, Gabelli Value is 2.86 times more volatile than Franklin Lifesmart Retirement. It trades about 0.13 of its potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.02 per unit of risk. If you would invest 1,072 in The Gabelli Value on August 30, 2024 and sell it today you would earn a total of 45.00 from holding The Gabelli Value or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Value vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Gabelli Value |
| Franklin Lifesmart |
Gabelli Value and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Value and Franklin Lifesmart
The main advantage of trading using opposite Gabelli Value and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Value 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.| Gabelli Value vs. Pace High Yield | Gabelli Value vs. Artisan High Income | Gabelli Value vs. Dunham High Yield | Gabelli Value vs. Gmo High Yield |
| Franklin Lifesmart vs. HUMANA INC | Franklin Lifesmart vs. Aquagold International | Franklin Lifesmart vs. Barloworld Ltd ADR | Franklin Lifesmart vs. Morningstar Unconstrained Allocation |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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