Correlation Between Franklin Lifesmart and Voya Retirement
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Voya Retirement 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 Voya Retirement 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 Voya Retirement Moderate, you can compare the effects of market volatilities on Franklin Lifesmart and Voya Retirement 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 Voya Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Voya Retirement.
Diversification Opportunities for Franklin Lifesmart and Voya Retirement
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and VOYA is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Voya Retirement Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Retirement Moderate 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 Voya Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Retirement Moderate has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Voya Retirement go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Voya Retirement
Assuming the 90 days horizon Franklin Lifesmart Retirement is expected to generate 0.92 times more return on investment than Voya Retirement. However, Franklin Lifesmart Retirement is 1.09 times less risky than Voya Retirement. It trades about 0.13 of its potential returns per unit of risk. Voya Retirement Moderate is currently generating about 0.09 per unit of risk. If you would invest 1,058 in Franklin Lifesmart Retirement on October 26, 2024 and sell it today you would earn a total of 10.00 from holding Franklin Lifesmart Retirement or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Voya Retirement Moderate
Performance |
| Timeline |
| Franklin Lifesmart |
| Voya Retirement Moderate |
Franklin Lifesmart and Voya Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Voya Retirement
The main advantage of trading using opposite Franklin Lifesmart and Voya Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Voya Retirement 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 Voya Retirement will offset losses from the drop in Voya Retirement's long position.| Franklin Lifesmart vs. Queens Road Small | Franklin Lifesmart vs. Valic Company I | Franklin Lifesmart vs. Mutual Of America | Franklin Lifesmart vs. Fidelity Small Cap |
| Voya Retirement vs. Rbb Fund | Voya Retirement vs. Fznopx | Voya Retirement vs. Fabwx | Voya Retirement vs. Wabmsx |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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