Correlation Between Jp Morgan and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Jp Morgan 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 Jp Morgan and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jp Morgan Smartretirement and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Jp Morgan 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 Jp Morgan with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jp Morgan and Franklin Lifesmart.
Diversification Opportunities for Jp Morgan and Franklin Lifesmart
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JTSQX and Franklin is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jp Morgan Smartretirement and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Jp Morgan 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 Jp Morgan Smartretirement 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 Jp Morgan i.e., Jp Morgan and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Jp Morgan and Franklin Lifesmart
Assuming the 90 days horizon Jp Morgan Smartretirement is expected to generate 2.3 times more return on investment than Franklin Lifesmart. However, Jp Morgan is 2.3 times more volatile than Franklin Lifesmart Retirement. It trades about 0.06 of its potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.09 per unit of risk. If you would invest 1,885 in Jp Morgan Smartretirement on August 24, 2024 and sell it today you would earn a total of 460.00 from holding Jp Morgan Smartretirement or generate 24.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jp Morgan Smartretirement vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Jp Morgan Smartretirement |
| Franklin Lifesmart |
Jp Morgan and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jp Morgan and Franklin Lifesmart
The main advantage of trading using opposite Jp Morgan and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jp Morgan 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.| Jp Morgan vs. Mainstay Vertible Fund | Jp Morgan vs. Allianzgi Convertible Income | Jp Morgan vs. Invesco Vertible Securities | Jp Morgan vs. Franklin Vertible Securities |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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