Correlation Between Live Oak and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Live Oak 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 Live Oak and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Health and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Live Oak 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 Live Oak with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Franklin Lifesmart.
Diversification Opportunities for Live Oak and Franklin Lifesmart
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Live and Franklin is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Live Oak 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 Live Oak Health 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 Live Oak i.e., Live Oak and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Live Oak and Franklin Lifesmart
Assuming the 90 days horizon Live Oak is expected to generate 6.02 times less return on investment than Franklin Lifesmart. In addition to that, Live Oak is 2.0 times more volatile than Franklin Lifesmart Retirement. It trades about 0.01 of its total potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.09 per unit of volatility. If you would invest 900.00 in Franklin Lifesmart Retirement on September 3, 2024 and sell it today you would earn a total of 163.00 from holding Franklin Lifesmart Retirement or generate 18.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Live Oak Health |
| Franklin Lifesmart |
Live Oak and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Franklin Lifesmart
The main advantage of trading using opposite Live Oak and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak 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.| Live Oak vs. Vanguard Health Care | Live Oak vs. Vanguard Health Care | Live Oak vs. T Rowe Price | Live Oak vs. T Rowe Price |
| Franklin Lifesmart vs. Live Oak Health | Franklin Lifesmart vs. Baron Health Care | Franklin Lifesmart vs. Eventide Healthcare Life | Franklin Lifesmart vs. Alphacentric Lifesci Healthcare |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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