Correlation Between Franklin Dynatech and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Franklin Dynatech 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 Franklin Dynatech and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Dynatech Fund and Franklin Lifesmart 2025, you can compare the effects of market volatilities on Franklin Dynatech 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 Franklin Dynatech with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Dynatech and Franklin Lifesmart.
Diversification Opportunities for Franklin Dynatech and Franklin Lifesmart
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Franklin is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Dynatech Fund and Franklin Lifesmart 2025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2025 and Franklin Dynatech 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 Franklin Dynatech Fund 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 2025 has no effect on the direction of Franklin Dynatech i.e., Franklin Dynatech and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Franklin Dynatech and Franklin Lifesmart
Assuming the 90 days horizon Franklin Dynatech Fund is expected to generate 2.83 times more return on investment than Franklin Lifesmart. However, Franklin Dynatech is 2.83 times more volatile than Franklin Lifesmart 2025. It trades about 0.3 of its potential returns per unit of risk. Franklin Lifesmart 2025 is currently generating about 0.29 per unit of risk. If you would invest 15,741 in Franklin Dynatech Fund on September 1, 2024 and sell it today you would earn a total of 1,099 from holding Franklin Dynatech Fund or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Dynatech Fund vs. Franklin Lifesmart 2025
Performance |
| Timeline |
| Franklin Dynatech |
| Franklin Lifesmart 2025 |
Franklin Dynatech and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Dynatech and Franklin Lifesmart
The main advantage of trading using opposite Franklin Dynatech and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Dynatech 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.| Franklin Dynatech vs. Mfs International Diversification | Franklin Dynatech vs. John Hancock Bond | Franklin Dynatech vs. Prudential Total Return | Franklin Dynatech vs. New World Fund |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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