Correlation Between Columbia Seligman and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Columbia Seligman 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 Columbia Seligman and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Seligman Munications and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Columbia Seligman 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 Columbia Seligman with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Seligman and Franklin Lifesmart.
Diversification Opportunities for Columbia Seligman and Franklin Lifesmart
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Columbia and Franklin is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Seligman Munications and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Columbia Seligman 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 Columbia Seligman Munications 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 Columbia Seligman i.e., Columbia Seligman and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Columbia Seligman and Franklin Lifesmart
Assuming the 90 days horizon Columbia Seligman Munications is expected to generate 3.24 times more return on investment than Franklin Lifesmart. However, Columbia Seligman is 3.24 times more volatile than Franklin Lifesmart Retirement. It trades about 0.04 of its potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.11 per unit of risk. If you would invest 4,702 in Columbia Seligman Munications on October 22, 2024 and sell it today you would earn a total of 37.00 from holding Columbia Seligman Munications or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Seligman Munications vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Columbia Seligman |
| Franklin Lifesmart |
Columbia Seligman and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Seligman and Franklin Lifesmart
The main advantage of trading using opposite Columbia Seligman and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Seligman 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.| Columbia Seligman vs. Fidelity Sai Convertible | Columbia Seligman vs. Gabelli Convertible And | Columbia Seligman vs. Absolute Convertible Arbitrage | Columbia Seligman vs. Advent Claymore Convertible |
| Franklin Lifesmart vs. Jpmorgan Smartretirement 2035 | Franklin Lifesmart vs. Sierra E Retirement | Franklin Lifesmart vs. Calvert Moderate Allocation | Franklin Lifesmart vs. Target Retirement 2040 |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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