Correlation Between Franklin Lifesmart and Metropolitan West
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Metropolitan West 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 Metropolitan West 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 Metropolitan West Opportunistic, you can compare the effects of market volatilities on Franklin Lifesmart and Metropolitan West 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 Metropolitan West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Metropolitan West.
Diversification Opportunities for Franklin Lifesmart and Metropolitan West
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FRANKLIN and Metropolitan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart 2050 and Metropolitan West Opportunisti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West 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 Metropolitan West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan West has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Metropolitan West go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Metropolitan West
If you would invest 1,559 in Franklin Lifesmart 2050 on September 4, 2024 and sell it today you would earn a total of 54.00 from holding Franklin Lifesmart 2050 or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart 2050 vs. Metropolitan West Opportunisti
Performance |
| Timeline |
| Franklin Lifesmart 2050 |
| Metropolitan West |
Franklin Lifesmart and Metropolitan West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Metropolitan West
The main advantage of trading using opposite Franklin Lifesmart and Metropolitan West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Metropolitan West 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 Metropolitan West will offset losses from the drop in Metropolitan West's long position.| Franklin Lifesmart vs. Franklin Mutual Beacon | Franklin Lifesmart vs. Templeton Developing Markets | Franklin Lifesmart vs. Franklin Mutual Global | Franklin Lifesmart vs. Franklin Mutual Global |
| Metropolitan West vs. Jhancock Diversified Macro | Metropolitan West vs. Principal Lifetime Hybrid | Metropolitan West vs. Sentinel Small Pany | Metropolitan West vs. Harbor Diversified 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |