Correlation Between Quantified Common and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Quantified Common 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 Quantified Common and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantified Common Ground and Franklin Lifesmart 2050, you can compare the effects of market volatilities on Quantified Common 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 Quantified Common with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantified Common and Franklin Lifesmart.
Diversification Opportunities for Quantified Common and Franklin Lifesmart
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Quantified and FRANKLIN is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Quantified Common Ground and Franklin Lifesmart 2050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2050 and Quantified Common 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 Quantified Common Ground 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 2050 has no effect on the direction of Quantified Common i.e., Quantified Common and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Quantified Common and Franklin Lifesmart
Assuming the 90 days horizon Quantified Common Ground is expected to generate 1.48 times more return on investment than Franklin Lifesmart. However, Quantified Common is 1.48 times more volatile than Franklin Lifesmart 2050. It trades about 0.33 of its potential returns per unit of risk. Franklin Lifesmart 2050 is currently generating about 0.29 per unit of risk. If you would invest 1,573 in Quantified Common Ground on September 4, 2024 and sell it today you would earn a total of 91.00 from holding Quantified Common Ground or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quantified Common Ground vs. Franklin Lifesmart 2050
Performance |
| Timeline |
| Quantified Common Ground |
| Franklin Lifesmart 2050 |
Quantified Common and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantified Common and Franklin Lifesmart
The main advantage of trading using opposite Quantified Common and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantified Common 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.| Quantified Common vs. Oil Gas Ultrasector | Quantified Common vs. Tortoise Energy Independence | Quantified Common vs. World Energy Fund | Quantified Common vs. Dreyfus Natural Resources |
| Franklin Lifesmart vs. Franklin Mutual Beacon | Franklin Lifesmart vs. Templeton Developing Markets | Franklin Lifesmart vs. Franklin Mutual Global | Franklin Lifesmart vs. Franklin Mutual Global |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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