Correlation Between Ms Global and Franklin Lifesmart

Can any of the company-specific risk be diversified away by investing in both Ms Global 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 Ms Global and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ms Global Fixed and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Ms Global 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 Ms Global with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ms Global and Franklin Lifesmart.

Diversification Opportunities for Ms Global and Franklin Lifesmart

0.74

Correlation Coefficient

Ms Global  Franklin Lifesmart

Poor diversification

The 3 months correlation between MFIRX and Franklin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ms Global Fixed and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Ms Global 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 Ms Global Fixed 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 Ms Global i.e., Ms Global and Franklin Lifesmart go up and down completely randomly.

Pair Corralation between Ms Global and Franklin Lifesmart

Assuming the 90 days horizon Ms Global Fixed is expected to generate 0.36 times more return on investment than Franklin Lifesmart. However, Ms Global Fixed is 2.78 times less risky than Franklin Lifesmart. It trades about 0.0 of its potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about -0.08 per unit of risk. If you would invest  523.00  in Ms Global Fixed on October 6, 2024 and sell it today you would earn a total of  0.00  from holding Ms Global Fixed or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ms Global Fixed  vs.  Franklin Lifesmart Retirement

Ms Global Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ms Global Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ms Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Franklin Lifesmart

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Lifesmart Retirement has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Franklin Lifesmart is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ms Global and Franklin Lifesmart

The main advantage of trading using opposite Ms Global and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ms Global 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.

The idea behind Ms Global Fixed and Franklin Lifesmart Retirement pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.