Correlation Between Franklin Lifesmart and Thrivent Natural
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Thrivent Natural 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 Thrivent Natural 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 Thrivent Natural Resources, you can compare the effects of market volatilities on Franklin Lifesmart and Thrivent Natural 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 Thrivent Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Thrivent Natural.
Diversification Opportunities for Franklin Lifesmart and Thrivent Natural
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Thrivent is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Thrivent Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Natural Res 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 Thrivent Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Natural Res has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Thrivent Natural go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Thrivent Natural
Assuming the 90 days horizon Franklin Lifesmart Retirement is expected to generate 1.38 times more return on investment than Thrivent Natural. However, Franklin Lifesmart is 1.38 times more volatile than Thrivent Natural Resources. It trades about 0.1 of its potential returns per unit of risk. Thrivent Natural Resources is currently generating about 0.1 per unit of risk. If you would invest 902.00 in Franklin Lifesmart Retirement on October 25, 2024 and sell it today you would earn a total of 164.00 from holding Franklin Lifesmart Retirement or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Thrivent Natural Resources
Performance |
| Timeline |
| Franklin Lifesmart |
| Thrivent Natural Res |
Franklin Lifesmart and Thrivent Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Thrivent Natural
The main advantage of trading using opposite Franklin Lifesmart and Thrivent Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Thrivent Natural 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 Thrivent Natural will offset losses from the drop in Thrivent Natural's long position.| Franklin Lifesmart vs. Vanguard Target Retirement | Franklin Lifesmart vs. Blackrock Lifepath Idx | Franklin Lifesmart vs. Aquagold International | Franklin Lifesmart vs. Morningstar Unconstrained Allocation |
| Thrivent Natural vs. Vanguard Total Stock | Thrivent Natural vs. Vanguard 500 Index | Thrivent Natural vs. Vanguard Total Stock | Thrivent Natural vs. Vanguard Total Stock |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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