Correlation Between Baron Health and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Baron Health 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 Baron Health and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Health Care and Franklin Lifesmart 2035, you can compare the effects of market volatilities on Baron Health 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 Baron Health with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Franklin Lifesmart.
Diversification Opportunities for Baron Health and Franklin Lifesmart
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baron and Franklin is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Franklin Lifesmart 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2035 and Baron Health 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 Baron Health Care 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 2035 has no effect on the direction of Baron Health i.e., Baron Health and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Baron Health and Franklin Lifesmart
Assuming the 90 days horizon Baron Health Care is expected to under-perform the Franklin Lifesmart. In addition to that, Baron Health is 2.84 times more volatile than Franklin Lifesmart 2035. It trades about -0.18 of its total potential returns per unit of risk. Franklin Lifesmart 2035 is currently generating about 0.16 per unit of volatility. If you would invest 1,486 in Franklin Lifesmart 2035 on September 20, 2024 and sell it today you would earn a total of 15.00 from holding Franklin Lifesmart 2035 or generate 1.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Baron Health Care vs. Franklin Lifesmart 2035
Performance |
Timeline |
Baron Health Care |
Franklin Lifesmart 2035 |
Baron Health and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baron Health and Franklin Lifesmart
The main advantage of trading using opposite Baron Health and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health 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.Baron Health vs. Inverse Government Long | Baron Health vs. Goldman Sachs Government | Baron Health vs. Fidelity Series Government | Baron Health vs. Schwab Government Money |
Franklin Lifesmart vs. Blackrock Health Sciences | Franklin Lifesmart vs. Deutsche Health And | Franklin Lifesmart vs. Baron Health Care | Franklin Lifesmart vs. Baillie Gifford Health |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |