Correlation Between Franklin Lifesmart and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Loomis Sayles 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 Loomis Sayles 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 Loomis Sayles Inflation, you can compare the effects of market volatilities on Franklin Lifesmart and Loomis Sayles 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 Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Loomis Sayles.
Diversification Opportunities for Franklin Lifesmart and Loomis Sayles
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Loomis is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Loomis Sayles Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Inflation 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 Loomis Sayles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loomis Sayles Inflation has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Loomis Sayles go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Loomis Sayles
Assuming the 90 days horizon Franklin Lifesmart Retirement is expected to generate 1.11 times more return on investment than Loomis Sayles. However, Franklin Lifesmart is 1.11 times more volatile than Loomis Sayles Inflation. It trades about 0.16 of its potential returns per unit of risk. Loomis Sayles Inflation is currently generating about 0.1 per unit of risk. If you would invest 1,008 in Franklin Lifesmart Retirement on September 3, 2024 and sell it today you would earn a total of 77.00 from holding Franklin Lifesmart Retirement or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Loomis Sayles Inflation
Performance |
| Timeline |
| Franklin Lifesmart |
| Loomis Sayles Inflation |
Franklin Lifesmart and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Loomis Sayles
The main advantage of trading using opposite Franklin Lifesmart and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Loomis Sayles 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 Loomis Sayles will offset losses from the drop in Loomis Sayles' long position.| Franklin Lifesmart vs. Health Biotchnology Portfolio | Franklin Lifesmart vs. Baillie Gifford Health | Franklin Lifesmart vs. Eventide Healthcare Life | Franklin Lifesmart vs. Health Biotchnology Portfolio |
| Loomis Sayles vs. Artisan High Income | Loomis Sayles vs. Ultra Short Fixed Income | Loomis Sayles vs. Gmo High Yield | Loomis Sayles vs. Multisector Bond Sma |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |