Correlation Between Sprott Gold and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Sprott Gold 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 Sprott Gold and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Gold Equity and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Sprott Gold 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 Sprott Gold with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and Franklin Lifesmart.
Diversification Opportunities for Sprott Gold and Franklin Lifesmart
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sprott and Franklin is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Sprott Gold 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 Sprott Gold Equity 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 Sprott Gold i.e., Sprott Gold and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Sprott Gold and Franklin Lifesmart
Assuming the 90 days horizon Sprott Gold Equity is expected to generate 3.15 times more return on investment than Franklin Lifesmart. However, Sprott Gold is 3.15 times more volatile than Franklin Lifesmart Retirement. It trades about 0.06 of its potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about -0.07 per unit of risk. If you would invest 5,397 in Sprott Gold Equity on October 18, 2024 and sell it today you would earn a total of 87.00 from holding Sprott Gold Equity or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Gold Equity vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Sprott Gold Equity |
| Franklin Lifesmart |
Sprott Gold and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and Franklin Lifesmart
The main advantage of trading using opposite Sprott Gold and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Gold 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.| Sprott Gold vs. Sprott Junior Gold | Sprott Gold vs. Sprott Gold Miners | Sprott Gold vs. Europac Gold Fund | Sprott Gold vs. US Global GO |
| Franklin Lifesmart vs. The Gold Bullion | Franklin Lifesmart vs. Sprott Gold Equity | Franklin Lifesmart vs. Goldman Sachs Short | Franklin Lifesmart vs. James Balanced Golden |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |