Correlation Between Franklin Lifesmart and Dimensional Retirement
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Dimensional 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 Dimensional 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 Dimensional Retirement Income, you can compare the effects of market volatilities on Franklin Lifesmart and Dimensional 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 Dimensional Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Dimensional Retirement.
Diversification Opportunities for Franklin Lifesmart and Dimensional Retirement
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Dimensional is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Dimensional Retirement Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional 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 Dimensional Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional Retirement has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Dimensional Retirement go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Dimensional Retirement
Assuming the 90 days horizon Franklin Lifesmart Retirement is expected to generate 1.44 times more return on investment than Dimensional Retirement. However, Franklin Lifesmart is 1.44 times more volatile than Dimensional Retirement Income. It trades about 0.15 of its potential returns per unit of risk. Dimensional Retirement Income is currently generating about 0.16 per unit of risk. If you would invest 957.00 in Franklin Lifesmart Retirement on September 4, 2024 and sell it today you would earn a total of 128.00 from holding Franklin Lifesmart Retirement or generate 13.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Dimensional Retirement Income
Performance |
| Timeline |
| Franklin Lifesmart |
| Dimensional Retirement |
Franklin Lifesmart and Dimensional Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Dimensional Retirement
The main advantage of trading using opposite Franklin Lifesmart and Dimensional Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Dimensional 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 Dimensional Retirement will offset losses from the drop in Dimensional Retirement's long position.| Franklin Lifesmart vs. Eic Value Fund | Franklin Lifesmart vs. Volumetric Fund Volumetric | Franklin Lifesmart vs. Qs Growth Fund | Franklin Lifesmart vs. Semiconductor Ultrasector Profund |
| Dimensional Retirement vs. Dunham Real Estate | Dimensional Retirement vs. Prudential Real Estate | Dimensional Retirement vs. Columbia Real Estate | Dimensional Retirement vs. Jhancock Real Estate |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |