Correlation Between Virtus Convertible and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Virtus Convertible 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 Virtus Convertible and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Convertible and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Virtus Convertible 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 Virtus Convertible with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Convertible and Franklin Lifesmart.
Diversification Opportunities for Virtus Convertible and Franklin Lifesmart
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virtus and Franklin is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Convertible and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Virtus Convertible 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 Virtus Convertible 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 Virtus Convertible i.e., Virtus Convertible and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Virtus Convertible and Franklin Lifesmart
Assuming the 90 days horizon Virtus Convertible is expected to generate 2.67 times more return on investment than Franklin Lifesmart. However, Virtus Convertible is 2.67 times more volatile than Franklin Lifesmart Retirement. It trades about 0.15 of its potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.06 per unit of risk. If you would invest 3,610 in Virtus Convertible on September 12, 2024 and sell it today you would earn a total of 73.00 from holding Virtus Convertible or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Convertible vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Virtus Convertible |
| Franklin Lifesmart |
Virtus Convertible and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Convertible and Franklin Lifesmart
The main advantage of trading using opposite Virtus Convertible and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Convertible 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.| Virtus Convertible vs. Acm Dynamic Opportunity | Virtus Convertible vs. Leggmason Partners Institutional | Virtus Convertible vs. Arrow Managed Futures | Virtus Convertible vs. Volumetric Fund Volumetric |
| Franklin Lifesmart vs. Jpmorgan Smartretirement Income | Franklin Lifesmart vs. HUMANA INC | Franklin Lifesmart vs. Barloworld Ltd ADR | Franklin Lifesmart vs. Morningstar Unconstrained Allocation |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |