Correlation Between Franklin Lifesmart and Hartford Schroders
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Hartford Schroders 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 Hartford Schroders 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 Hartford Schroders Emerging, you can compare the effects of market volatilities on Franklin Lifesmart and Hartford Schroders 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 Hartford Schroders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Hartford Schroders.
Diversification Opportunities for Franklin Lifesmart and Hartford Schroders
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FRANKLIN and Hartford is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart 2050 and Hartford Schroders Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Schroders 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 Hartford Schroders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Schroders has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Hartford Schroders go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Hartford Schroders
Assuming the 90 days horizon Franklin Lifesmart 2050 is expected to generate 0.69 times more return on investment than Hartford Schroders. However, Franklin Lifesmart 2050 is 1.44 times less risky than Hartford Schroders. It trades about 0.3 of its potential returns per unit of risk. Hartford Schroders Emerging is currently generating about -0.12 per unit of risk. If you would invest 1,559 in Franklin Lifesmart 2050 on September 5, 2024 and sell it today you would earn a total of 57.00 from holding Franklin Lifesmart 2050 or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart 2050 vs. Hartford Schroders Emerging
Performance |
| Timeline |
| Franklin Lifesmart 2050 |
| Hartford Schroders |
Franklin Lifesmart and Hartford Schroders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Hartford Schroders
The main advantage of trading using opposite Franklin Lifesmart and Hartford Schroders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Hartford Schroders 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 Hartford Schroders will offset losses from the drop in Hartford Schroders' long position.| Franklin Lifesmart vs. Qs Moderate Growth | Franklin Lifesmart vs. T Rowe Price | Franklin Lifesmart vs. T Rowe Price | Franklin Lifesmart vs. Virtus Dfa 2040 |
| Hartford Schroders vs. The Hartford Growth | Hartford Schroders vs. The Hartford Growth | Hartford Schroders vs. The Hartford Growth | Hartford Schroders vs. The Hartford Growth |
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.
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