Correlation Between Lifestyle and Franklin Arizona
Can any of the company-specific risk be diversified away by investing in both Lifestyle and Franklin Arizona 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 Lifestyle and Franklin Arizona into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifestyle Ii Moderate and Franklin Arizona Tax Free, you can compare the effects of market volatilities on Lifestyle and Franklin Arizona 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 Lifestyle with a short position of Franklin Arizona. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifestyle and Franklin Arizona.
Diversification Opportunities for Lifestyle and Franklin Arizona
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lifestyle and Franklin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lifestyle Ii Moderate and Franklin Arizona Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Arizona Tax and Lifestyle 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 Lifestyle Ii Moderate are associated (or correlated) with Franklin Arizona. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Arizona Tax has no effect on the direction of Lifestyle i.e., Lifestyle and Franklin Arizona go up and down completely randomly.
Pair Corralation between Lifestyle and Franklin Arizona
Assuming the 90 days horizon Lifestyle Ii Moderate is expected to generate 1.01 times more return on investment than Franklin Arizona. However, Lifestyle is 1.01 times more volatile than Franklin Arizona Tax Free. It trades about 0.3 of its potential returns per unit of risk. Franklin Arizona Tax Free is currently generating about 0.2 per unit of risk. If you would invest 1,096 in Lifestyle Ii Moderate on September 1, 2024 and sell it today you would earn a total of 23.00 from holding Lifestyle Ii Moderate or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lifestyle Ii Moderate vs. Franklin Arizona Tax Free
Performance |
| Timeline |
| Lifestyle Ii Moderate |
| Franklin Arizona Tax |
Lifestyle and Franklin Arizona Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifestyle and Franklin Arizona
The main advantage of trading using opposite Lifestyle and Franklin Arizona positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifestyle position performs unexpectedly, Franklin Arizona 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 Arizona will offset losses from the drop in Franklin Arizona's long position.| Lifestyle vs. Balanced Fund Investor | Lifestyle vs. T Rowe Price | Lifestyle vs. Fa 529 Aggressive | Lifestyle vs. Western Asset Municipal |
| Franklin Arizona vs. Franklin Mutual Beacon | Franklin Arizona vs. Templeton Developing Markets | Franklin Arizona vs. Franklin Mutual Global | Franklin Arizona vs. Franklin Mutual Global |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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