Correlation Between Franklin Necticut and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Franklin Necticut and Franklin Lifesmart 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 Necticut and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Necticut Tax Free and Franklin Lifesmart 2035, you can compare the effects of market volatilities on Franklin Necticut and Franklin Lifesmart 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 Necticut with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Necticut and Franklin Lifesmart.
Diversification Opportunities for Franklin Necticut and Franklin Lifesmart
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Necticut Tax Free and Franklin Lifesmart 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2035 and Franklin Necticut 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 Necticut Tax Free are associated (or correlated) with Franklin Lifesmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Lifesmart 2035 has no effect on the direction of Franklin Necticut i.e., Franklin Necticut and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Franklin Necticut and Franklin Lifesmart
Assuming the 90 days horizon Franklin Necticut is expected to generate 3.41 times less return on investment than Franklin Lifesmart. But when comparing it to its historical volatility, Franklin Necticut Tax Free is 2.02 times less risky than Franklin Lifesmart. It trades about 0.06 of its potential returns per unit of risk. Franklin Lifesmart 2035 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,169 in Franklin Lifesmart 2035 on November 9, 2024 and sell it today you would earn a total of 351.00 from holding Franklin Lifesmart 2035 or generate 30.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 92.9% |
| Values | Daily Returns |
Franklin Necticut Tax Free vs. Franklin Lifesmart 2035
Performance |
| Timeline |
| Franklin Necticut Tax |
| Franklin Lifesmart 2035 |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Franklin Necticut and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Necticut and Franklin Lifesmart
The main advantage of trading using opposite Franklin Necticut and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Necticut position performs unexpectedly, Franklin Lifesmart 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 Franklin Lifesmart will offset losses from the drop in Franklin Lifesmart's long position.| Franklin Necticut vs. Kinetics Global Fund | Franklin Necticut vs. Bbh Partner Fund | Franklin Necticut vs. California Bond Fund | Franklin Necticut vs. Growth Fund Of |
| Franklin Lifesmart vs. Icon Financial Fund | Franklin Lifesmart vs. Putnam Global Financials | Franklin Lifesmart vs. Rmb Mendon Financial | Franklin Lifesmart vs. Fidelity Advisor Financial |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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