Correlation Between Franklin Lifesmart and Northern Global
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Northern Global 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 Northern Global 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 Northern Global Real, you can compare the effects of market volatilities on Franklin Lifesmart and Northern Global 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 Northern Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Northern Global.
Diversification Opportunities for Franklin Lifesmart and Northern Global
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Northern is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Northern Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Global Real 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 Northern Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Global Real has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Northern Global go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Northern Global
Assuming the 90 days horizon Franklin Lifesmart Retirement is expected to generate 0.4 times more return on investment than Northern Global. However, Franklin Lifesmart Retirement is 2.49 times less risky than Northern Global. It trades about 0.12 of its potential returns per unit of risk. Northern Global Real is currently generating about 0.05 per unit of risk. If you would invest 941.00 in Franklin Lifesmart Retirement on November 5, 2024 and sell it today you would earn a total of 122.00 from holding Franklin Lifesmart Retirement or generate 12.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Northern Global Real
Performance |
| Timeline |
| Franklin Lifesmart |
| Northern Global Real |
Franklin Lifesmart and Northern Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Northern Global
The main advantage of trading using opposite Franklin Lifesmart and Northern Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Northern Global 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 Northern Global will offset losses from the drop in Northern Global's long position.| Franklin Lifesmart vs. Jpmorgan Ultra Short Municipal | Franklin Lifesmart vs. Old Westbury California | Franklin Lifesmart vs. Oklahoma Municipal Fund | Franklin Lifesmart vs. Franklin Adjustable Government |
| Northern Global vs. Lgm Risk Managed | Northern Global vs. The Hartford High | Northern Global vs. Ab High Income | Northern Global vs. Ironclad Managed Risk |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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