Correlation Between Franklin Lifesmart and The Hartford
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and The Hartford 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 Lifesmart and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Lifesmart Retirement and The Hartford Growth, you can compare the effects of market volatilities on Franklin Lifesmart and The Hartford 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 Lifesmart with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and The Hartford.
Diversification Opportunities for Franklin Lifesmart and The Hartford
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FRANKLIN and The is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Franklin Lifesmart 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 Lifesmart Retirement are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and The Hartford go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and The Hartford
Assuming the 90 days horizon Franklin Lifesmart is expected to generate 5.5 times less return on investment than The Hartford. But when comparing it to its historical volatility, Franklin Lifesmart Retirement is 3.9 times less risky than The Hartford. It trades about 0.15 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 5,011 in The Hartford Growth on September 2, 2024 and sell it today you would earn a total of 760.00 from holding The Hartford Growth or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. The Hartford Growth
Performance |
| Timeline |
| Franklin Lifesmart |
| Hartford Growth |
Franklin Lifesmart and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and The Hartford
The main advantage of trading using opposite Franklin Lifesmart and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Franklin Lifesmart vs. Maryland Short Term Tax Free | Franklin Lifesmart vs. Barings Active Short | Franklin Lifesmart vs. Touchstone Ultra Short | Franklin Lifesmart vs. Goldman Sachs Short Term |
| The Hartford vs. Alliancebernstein National Municipal | The Hartford vs. California High Yield Municipal | The Hartford vs. Nuveen Minnesota Municipal | The Hartford vs. T Rowe Price |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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