Correlation Between Franklin Lifesmart and Access Capital
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Access Capital 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 Access Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Lifesmart Retirement and Access Capital Munity, you can compare the effects of market volatilities on Franklin Lifesmart and Access Capital 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 Access Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Access Capital.
Diversification Opportunities for Franklin Lifesmart and Access Capital
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Access is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Access Capital Munity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Access Capital Munity 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 Retirement are associated (or correlated) with Access Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Access Capital Munity has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Access Capital go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Access Capital
Assuming the 90 days horizon Franklin Lifesmart Retirement is expected to generate 0.82 times more return on investment than Access Capital. However, Franklin Lifesmart Retirement is 1.22 times less risky than Access Capital. It trades about 0.11 of its potential returns per unit of risk. Access Capital Munity is currently generating about 0.03 per unit of risk. If you would invest 923.00 in Franklin Lifesmart Retirement on September 2, 2024 and sell it today you would earn a total of 140.00 from holding Franklin Lifesmart Retirement or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Access Capital Munity
Performance |
| Timeline |
| Franklin Lifesmart |
| Access Capital Munity |
Franklin Lifesmart and Access Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Access Capital
The main advantage of trading using opposite Franklin Lifesmart and Access Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Access Capital 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 Access Capital will offset losses from the drop in Access Capital's long position.| Franklin Lifesmart vs. Champlain Small | Franklin Lifesmart vs. Baird Smallmid Cap | Franklin Lifesmart vs. Ab Small Cap | Franklin Lifesmart vs. The Hartford Small |
| Access Capital vs. T Rowe Price | Access Capital vs. Jhancock Disciplined Value | Access Capital vs. Aqr Large Cap | Access Capital vs. Principal Lifetime Hybrid |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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