Correlation Between Victory Strategic and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Victory Strategic 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 Victory Strategic and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Strategic Allocation and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Victory Strategic 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 Victory Strategic with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Strategic and Franklin Lifesmart.
Diversification Opportunities for Victory Strategic and Franklin Lifesmart
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Victory and Franklin is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Victory Strategic Allocation and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Victory Strategic 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 Victory Strategic Allocation 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 Victory Strategic i.e., Victory Strategic and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Victory Strategic and Franklin Lifesmart
Assuming the 90 days horizon Victory Strategic is expected to generate 1.62 times less return on investment than Franklin Lifesmart. In addition to that, Victory Strategic is 1.48 times more volatile than Franklin Lifesmart Retirement. It trades about 0.03 of its total potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.07 per unit of volatility. If you would invest 1,059 in Franklin Lifesmart Retirement on September 13, 2024 and sell it today you would earn a total of 8.00 from holding Franklin Lifesmart Retirement or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Victory Strategic Allocation vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Victory Strategic |
| Franklin Lifesmart |
Victory Strategic and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Strategic and Franklin Lifesmart
The main advantage of trading using opposite Victory Strategic and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Strategic 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.| Victory Strategic vs. Victory Rs International | Victory Strategic vs. Victory High Yield | Victory Strategic vs. Victory Sycamore Established | Victory Strategic vs. Victory Integrity Discovery |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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