Correlation Between Franklin Lifesmart and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Fidelity Freedom 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 Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Lifesmart 2050 and Fidelity Freedom 2050, you can compare the effects of market volatilities on Franklin Lifesmart and Fidelity Freedom 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 Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Fidelity Freedom.
Diversification Opportunities for Franklin Lifesmart and Fidelity Freedom
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between FRANKLIN and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart 2050 and Fidelity Freedom 2050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2050 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 2050 are associated (or correlated) with Fidelity Freedom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Freedom 2050 has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Fidelity Freedom
Assuming the 90 days horizon Franklin Lifesmart 2050 is expected to generate 1.0 times more return on investment than Fidelity Freedom. However, Franklin Lifesmart is 1.0 times more volatile than Fidelity Freedom 2050. It trades about 0.08 of its potential returns per unit of risk. Fidelity Freedom 2050 is currently generating about 0.07 per unit of risk. If you would invest 1,496 in Franklin Lifesmart 2050 on September 3, 2024 and sell it today you would earn a total of 113.00 from holding Franklin Lifesmart 2050 or generate 7.55% 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 2050 vs. Fidelity Freedom 2050
Performance |
| Timeline |
| Franklin Lifesmart 2050 |
| Fidelity Freedom 2050 |
Franklin Lifesmart and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Fidelity Freedom
The main advantage of trading using opposite Franklin Lifesmart and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Fidelity Freedom 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 Fidelity Freedom will offset losses from the drop in Fidelity Freedom's long position.| Franklin Lifesmart vs. Vanguard Target Retirement | Franklin Lifesmart vs. American Funds 2050 | Franklin Lifesmart vs. American Funds 2050 | Franklin Lifesmart vs. American Funds 2050 |
| Fidelity Freedom vs. Fidelity Freedom 2045 | Fidelity Freedom vs. Fidelity Freedom 2005 | Fidelity Freedom vs. Fidelity Freedom Income | Fidelity Freedom vs. Fidelity Freedom 2015 |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |