Correlation Between Great-west Lifetime and Franklin Real
Can any of the company-specific risk be diversified away by investing in both Great-west Lifetime and Franklin Real 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 Great-west Lifetime and Franklin Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Lifetime 2015 and Franklin Real Estate, you can compare the effects of market volatilities on Great-west Lifetime and Franklin Real 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 Great-west Lifetime with a short position of Franklin Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great-west Lifetime and Franklin Real.
Diversification Opportunities for Great-west Lifetime and Franklin Real
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Great-west and Franklin is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Great West Lifetime 2015 and Franklin Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Real Estate and Great-west Lifetime 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 Great West Lifetime 2015 are associated (or correlated) with Franklin Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Real Estate has no effect on the direction of Great-west Lifetime i.e., Great-west Lifetime and Franklin Real go up and down completely randomly.
Pair Corralation between Great-west Lifetime and Franklin Real
Assuming the 90 days horizon Great-west Lifetime is expected to generate 1.29 times less return on investment than Franklin Real. But when comparing it to its historical volatility, Great West Lifetime 2015 is 2.79 times less risky than Franklin Real. It trades about 0.06 of its potential returns per unit of risk. Franklin Real Estate is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,810 in Franklin Real Estate on September 3, 2024 and sell it today you would earn a total of 215.00 from holding Franklin Real Estate or generate 11.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Lifetime 2015 vs. Franklin Real Estate
Performance |
| Timeline |
| Great West Lifetime |
| Franklin Real Estate |
Great-west Lifetime and Franklin Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great-west Lifetime and Franklin Real
The main advantage of trading using opposite Great-west Lifetime and Franklin Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great-west Lifetime position performs unexpectedly, Franklin Real 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 Real will offset losses from the drop in Franklin Real's long position.| Great-west Lifetime vs. Franklin Real Estate | Great-west Lifetime vs. Columbia Real Estate | Great-west Lifetime vs. Virtus Real Estate | Great-west Lifetime vs. Dunham Real Estate |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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