Correlation Between Rush Street and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Rush Street 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 Rush Street and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rush Street Interactive and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Rush Street 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 Rush Street with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Franklin Lifesmart.
Diversification Opportunities for Rush Street and Franklin Lifesmart
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rush and Franklin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Rush Street 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 Rush Street Interactive 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 Rush Street i.e., Rush Street and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Rush Street and Franklin Lifesmart
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 10.22 times more return on investment than Franklin Lifesmart. However, Rush Street is 10.22 times more volatile than Franklin Lifesmart Retirement. It trades about 0.13 of its potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.12 per unit of risk. If you would invest 302.00 in Rush Street Interactive on August 28, 2024 and sell it today you would earn a total of 1,078 from holding Rush Street Interactive or generate 356.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Rush Street Interactive vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Rush Street Interactive |
| Franklin Lifesmart |
Rush Street and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Franklin Lifesmart
The main advantage of trading using opposite Rush Street and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street 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.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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