Correlation Between Fidelity Managed and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Fidelity Managed 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 Fidelity Managed and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Managed Retirement and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Fidelity Managed 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 Fidelity Managed with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Managed and Franklin Lifesmart.
Diversification Opportunities for Fidelity Managed and Franklin Lifesmart
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Franklin is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Managed Retirement and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Fidelity Managed 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 Fidelity Managed Retirement 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 Fidelity Managed i.e., Fidelity Managed and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Fidelity Managed and Franklin Lifesmart
Assuming the 90 days horizon Fidelity Managed Retirement is expected to generate 0.94 times more return on investment than Franklin Lifesmart. However, Fidelity Managed Retirement is 1.06 times less risky than Franklin Lifesmart. It trades about 0.22 of its potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.2 per unit of risk. If you would invest 5,306 in Fidelity Managed Retirement on November 2, 2024 and sell it today you would earn a total of 84.00 from holding Fidelity Managed Retirement or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Managed Retirement vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Fidelity Managed Ret |
| Franklin Lifesmart |
Fidelity Managed and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Managed and Franklin Lifesmart
The main advantage of trading using opposite Fidelity Managed and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Managed 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.| Fidelity Managed vs. Us Government Securities | Fidelity Managed vs. Franklin Adjustable Government | Fidelity Managed vs. Federated Government Ultrashort | Fidelity Managed vs. Dunham Porategovernment Bond |
| Franklin Lifesmart vs. Vanguard Small Cap Value | Franklin Lifesmart vs. Ultramid Cap Profund Ultramid Cap | Franklin Lifesmart vs. Ab Small Cap | Franklin Lifesmart vs. Mutual Of America |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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