Correlation Between Invesco Gold and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Invesco Gold 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 Invesco Gold and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Gold Special and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Invesco Gold 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 Invesco Gold with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Gold and Franklin Lifesmart.
Diversification Opportunities for Invesco Gold and Franklin Lifesmart
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Invesco and Franklin is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Gold Special and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Invesco Gold 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 Invesco Gold Special 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 Invesco Gold i.e., Invesco Gold and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Invesco Gold and Franklin Lifesmart
Assuming the 90 days horizon Invesco Gold Special is expected to under-perform the Franklin Lifesmart. In addition to that, Invesco Gold is 4.85 times more volatile than Franklin Lifesmart Retirement. It trades about -0.07 of its total potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.06 per unit of volatility. If you would invest 1,053 in Franklin Lifesmart Retirement on October 24, 2024 and sell it today you would earn a total of 14.00 from holding Franklin Lifesmart Retirement or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Gold Special vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Invesco Gold Special |
| Franklin Lifesmart |
Invesco Gold and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Gold and Franklin Lifesmart
The main advantage of trading using opposite Invesco Gold and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Gold 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.| Invesco Gold vs. Wmcapx | Invesco Gold vs. Fxybjx | Invesco Gold vs. Fa 529 Aggressive | Invesco Gold vs. Abr 7525 Volatility |
| Franklin Lifesmart vs. Invesco Gold Special | Franklin Lifesmart vs. Short Precious Metals | Franklin Lifesmart vs. Gold Portfolio Fidelity | Franklin Lifesmart vs. First Eagle Gold |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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