Correlation Between Lsv Small and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Lsv Small 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 Lsv Small and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lsv Small Cap and Franklin Lifesmart 2055, you can compare the effects of market volatilities on Lsv Small 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 Lsv Small with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lsv Small and Franklin Lifesmart.
Diversification Opportunities for Lsv Small and Franklin Lifesmart
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lsv and Franklin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Small Cap and Franklin Lifesmart 2055 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2055 and Lsv Small 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 Lsv Small Cap 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 2055 has no effect on the direction of Lsv Small i.e., Lsv Small and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Lsv Small and Franklin Lifesmart
Assuming the 90 days horizon Lsv Small is expected to generate 1.2 times less return on investment than Franklin Lifesmart. In addition to that, Lsv Small is 1.63 times more volatile than Franklin Lifesmart 2055. It trades about 0.05 of its total potential returns per unit of risk. Franklin Lifesmart 2055 is currently generating about 0.09 per unit of volatility. If you would invest 1,132 in Franklin Lifesmart 2055 on September 12, 2024 and sell it today you would earn a total of 272.00 from holding Franklin Lifesmart 2055 or generate 24.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lsv Small Cap vs. Franklin Lifesmart 2055
Performance |
| Timeline |
| Lsv Small Cap |
| Franklin Lifesmart 2055 |
Lsv Small and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lsv Small and Franklin Lifesmart
The main advantage of trading using opposite Lsv Small and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lsv Small 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.| Lsv Small vs. Vanguard Small Cap Value | Lsv Small vs. Vanguard Small Cap Value | Lsv Small vs. Us Small Cap | Lsv Small vs. Us Targeted Value |
| Franklin Lifesmart vs. Lsv Small Cap | Franklin Lifesmart vs. Pace Smallmedium Value | Franklin Lifesmart vs. Heartland Value Plus | Franklin Lifesmart vs. Boston Partners Small |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |