Correlation Between Franklin Lifesmart and Putnam Retirement
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Putnam 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 Putnam 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 Putnam Retirement Advantage, you can compare the effects of market volatilities on Franklin Lifesmart and Putnam 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 Putnam Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Putnam Retirement.
Diversification Opportunities for Franklin Lifesmart and Putnam Retirement
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Putnam is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Putnam Retirement Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Retirement 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 Putnam Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Retirement has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Putnam Retirement go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Putnam Retirement
Assuming the 90 days horizon Franklin Lifesmart is expected to generate 2.02 times less return on investment than Putnam Retirement. But when comparing it to its historical volatility, Franklin Lifesmart Retirement is 2.19 times less risky than Putnam Retirement. It trades about 0.11 of its potential returns per unit of risk. Putnam Retirement Advantage is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 995.00 in Putnam Retirement Advantage on October 20, 2024 and sell it today you would earn a total of 208.00 from holding Putnam Retirement Advantage or generate 20.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Putnam Retirement Advantage
Performance |
| Timeline |
| Franklin Lifesmart |
| Putnam Retirement |
Franklin Lifesmart and Putnam Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Putnam Retirement
The main advantage of trading using opposite Franklin Lifesmart and Putnam Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Putnam 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 Putnam Retirement will offset losses from the drop in Putnam Retirement's long position.| Franklin Lifesmart vs. Access Flex High | Franklin Lifesmart vs. Mesirow Financial High | Franklin Lifesmart vs. Ab High Income | Franklin Lifesmart vs. Inverse High Yield |
| Putnam Retirement vs. Putnam Equity Income | Putnam Retirement vs. Putnam Tax Exempt | Putnam Retirement vs. Putnam Floating Rate | Putnam Retirement vs. Putnam High Yield |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |