Correlation Between Guggenheim Managed and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Guggenheim Managed 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 Guggenheim Managed and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Managed Futures and Franklin Lifesmart 2050, you can compare the effects of market volatilities on Guggenheim Managed 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 Guggenheim Managed with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Managed and Franklin Lifesmart.
Diversification Opportunities for Guggenheim Managed and Franklin Lifesmart
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guggenheim and Franklin is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Managed Futures 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 Guggenheim Managed 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 Guggenheim Managed Futures 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 Guggenheim Managed i.e., Guggenheim Managed and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Guggenheim Managed and Franklin Lifesmart
Assuming the 90 days horizon Guggenheim Managed Futures is expected to generate 0.66 times more return on investment than Franklin Lifesmart. However, Guggenheim Managed Futures is 1.52 times less risky than Franklin Lifesmart. It trades about 0.17 of its potential returns per unit of risk. Franklin Lifesmart 2050 is currently generating about -0.2 per unit of risk. If you would invest 2,022 in Guggenheim Managed Futures on October 11, 2024 and sell it today you would earn a total of 40.00 from holding Guggenheim Managed Futures or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Managed Futures vs. Franklin Lifesmart 2050
Performance |
| Timeline |
| Guggenheim Managed |
| Franklin Lifesmart 2050 |
Guggenheim Managed and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Managed and Franklin Lifesmart
The main advantage of trading using opposite Guggenheim Managed and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Managed 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.| Guggenheim Managed vs. Franklin Government Money | Guggenheim Managed vs. Ab Impact Municipal | Guggenheim Managed vs. Gamco Global Telecommunications | Guggenheim Managed vs. Dws Government Money |
| Franklin Lifesmart vs. Atac Inflation Rotation | Franklin Lifesmart vs. Blackrock Inflation Protected | Franklin Lifesmart vs. Ab Bond Inflation | Franklin Lifesmart vs. Guggenheim Managed Futures |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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