Correlation Between Franklin Lifesmart and Boston Mon
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Boston Mon 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 Boston Mon 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 Boston Mon International, you can compare the effects of market volatilities on Franklin Lifesmart and Boston Mon 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 Boston Mon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Boston Mon.
Diversification Opportunities for Franklin Lifesmart and Boston Mon
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Boston is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart 2055 and Boston Mon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Mon International 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 Boston Mon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Mon International has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Boston Mon go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Boston Mon
Assuming the 90 days horizon Franklin Lifesmart is expected to generate 1.08 times less return on investment than Boston Mon. But when comparing it to its historical volatility, Franklin Lifesmart 2055 is 1.4 times less risky than Boston Mon. It trades about 0.17 of its potential returns per unit of risk. Boston Mon International is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,256 in Boston Mon International on September 13, 2024 and sell it today you would earn a total of 52.00 from holding Boston Mon International or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Lifesmart 2055 vs. Boston Mon International
Performance |
| Timeline |
| Franklin Lifesmart 2055 |
| Boston Mon International |
Franklin Lifesmart and Boston Mon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Boston Mon
The main advantage of trading using opposite Franklin Lifesmart and Boston Mon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Boston Mon 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 Boston Mon will offset losses from the drop in Boston Mon'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 |
| Boston Mon vs. Transamerica Financial Life | Boston Mon vs. Angel Oak Financial | Boston Mon vs. Gabelli Global Financial | Boston Mon vs. Icon Financial Fund |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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