Correlation Between Qs Growth and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Qs Growth 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 Qs Growth and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qs Growth Fund and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Qs Growth 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 Qs Growth with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qs Growth and Franklin Lifesmart.
Diversification Opportunities for Qs Growth and Franklin Lifesmart
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LANIX and Franklin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Qs Growth Fund and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Qs Growth 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 Qs Growth Fund 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 Qs Growth i.e., Qs Growth and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Qs Growth and Franklin Lifesmart
Assuming the 90 days horizon Qs Growth is expected to generate 1.61 times less return on investment than Franklin Lifesmart. In addition to that, Qs Growth is 1.99 times more volatile than Franklin Lifesmart Retirement. It trades about 0.02 of its total potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.08 per unit of volatility. If you would invest 1,080 in Franklin Lifesmart Retirement on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Franklin Lifesmart Retirement or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qs Growth Fund vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Qs Growth Fund |
| Franklin Lifesmart |
Qs Growth and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qs Growth and Franklin Lifesmart
The main advantage of trading using opposite Qs Growth and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qs Growth 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.| Qs Growth vs. Msift High Yield | Qs Growth vs. City National Rochdale | Qs Growth vs. Gmo High Yield | Qs Growth vs. Voya High Yield |
| Franklin Lifesmart vs. T Rowe Price | Franklin Lifesmart vs. Upright Assets Allocation | Franklin Lifesmart vs. Dodge Cox Stock | Franklin Lifesmart vs. Aqr Large Cap |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |