Correlation Between Blackrock and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Blackrock 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 Blackrock and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Sm Cap and Franklin Lifesmart 2055, you can compare the effects of market volatilities on Blackrock 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 Blackrock with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock and Franklin Lifesmart.
Diversification Opportunities for Blackrock and Franklin Lifesmart
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackrock and Franklin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Sm 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 Blackrock 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 Blackrock Sm 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 Blackrock i.e., Blackrock and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Blackrock and Franklin Lifesmart
Assuming the 90 days horizon Blackrock Sm Cap is expected to under-perform the Franklin Lifesmart. In addition to that, Blackrock is 2.27 times more volatile than Franklin Lifesmart 2055. It trades about -0.09 of its total potential returns per unit of risk. Franklin Lifesmart 2055 is currently generating about 0.07 per unit of volatility. If you would invest 1,443 in Franklin Lifesmart 2055 on September 12, 2024 and sell it today you would earn a total of 10.00 from holding Franklin Lifesmart 2055 or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Blackrock Sm Cap vs. Franklin Lifesmart 2055
Performance |
| Timeline |
| Blackrock Sm Cap |
| Franklin Lifesmart 2055 |
Blackrock and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock and Franklin Lifesmart
The main advantage of trading using opposite Blackrock and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock 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.| Blackrock vs. Blackrock Intern Index | Blackrock vs. Blackrock Sp 500 | Blackrock vs. Blackrock Bond Index | Blackrock vs. Blackrock Small Cap |
| Franklin Lifesmart vs. Goldman Sachs Inflation | Franklin Lifesmart vs. Ab Bond Inflation | Franklin Lifesmart vs. Lord Abbett Inflation | Franklin Lifesmart vs. Simt Multi Asset Inflation |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |