Correlation Between Franklin Lifesmart and Sentinel Low
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Sentinel Low 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 Sentinel Low 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 Sentinel Low Duration, you can compare the effects of market volatilities on Franklin Lifesmart and Sentinel Low 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 Sentinel Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Sentinel Low.
Diversification Opportunities for Franklin Lifesmart and Sentinel Low
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FRANKLIN and Sentinel is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart 2050 and Sentinel Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Low Duration 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 Sentinel Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Low Duration has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Sentinel Low go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Sentinel Low
Assuming the 90 days horizon Franklin Lifesmart 2050 is expected to generate 23.33 times more return on investment than Sentinel Low. However, Franklin Lifesmart is 23.33 times more volatile than Sentinel Low Duration. It trades about 0.29 of its potential returns per unit of risk. Sentinel Low Duration is currently generating about 0.22 per unit of risk. 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 | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Franklin Lifesmart 2050 vs. Sentinel Low Duration
Performance |
| Timeline |
| Franklin Lifesmart 2050 |
| Sentinel Low Duration |
Franklin Lifesmart and Sentinel Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Sentinel Low
The main advantage of trading using opposite Franklin Lifesmart and Sentinel Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Sentinel Low 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 Sentinel Low will offset losses from the drop in Sentinel Low'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 |
| Sentinel Low vs. Lind Capital Partners | Sentinel Low vs. Cs 607 Tax | Sentinel Low vs. Bbh Intermediate Municipal | Sentinel Low vs. Franklin High Yield |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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