Correlation Between Franklin Lifesmart and The Hartford
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and The Hartford 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 The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Lifesmart 2055 and The Hartford Inflation, you can compare the effects of market volatilities on Franklin Lifesmart and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and The Hartford.
Diversification Opportunities for Franklin Lifesmart and The Hartford
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and The is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart 2055 and The Hartford Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford 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 2055 are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Inflation has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and The Hartford go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and The Hartford
Assuming the 90 days horizon Franklin Lifesmart 2055 is expected to generate 3.59 times more return on investment than The Hartford. However, Franklin Lifesmart is 3.59 times more volatile than The Hartford Inflation. It trades about 0.09 of its potential returns per unit of risk. The Hartford Inflation is currently generating about 0.03 per unit of risk. If you would invest 1,409 in Franklin Lifesmart 2055 on August 29, 2024 and sell it today you would earn a total of 18.00 from holding Franklin Lifesmart 2055 or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart 2055 vs. The Hartford Inflation
Performance |
| Timeline |
| Franklin Lifesmart 2055 |
| The Hartford Inflation |
Franklin Lifesmart and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and The Hartford
The main advantage of trading using opposite Franklin Lifesmart and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Franklin Lifesmart vs. The Hartford Inflation | Franklin Lifesmart vs. Guidepath Managed Futures | Franklin Lifesmart vs. Ab Bond Inflation | Franklin Lifesmart vs. Ab Municipal Bond |
| The Hartford vs. Vanguard Inflation Protected Securities | The Hartford vs. American Funds Inflation | The Hartford vs. HUMANA INC | The Hartford vs. Aquagold International |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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