Correlation Between Franklin Lifesmart and Income Fund
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Income Fund 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 Income Fund 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 Income Fund Of, you can compare the effects of market volatilities on Franklin Lifesmart and Income Fund 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 Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Income Fund.
Diversification Opportunities for Franklin Lifesmart and Income Fund
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Income is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Income Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund 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 Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Income Fund go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Income Fund
Assuming the 90 days horizon Franklin Lifesmart Retirement is expected to generate 0.66 times more return on investment than Income Fund. However, Franklin Lifesmart Retirement is 1.52 times less risky than Income Fund. It trades about 0.16 of its potential returns per unit of risk. Income Fund Of is currently generating about 0.08 per unit of risk. If you would invest 1,053 in Franklin Lifesmart Retirement on September 15, 2024 and sell it today you would earn a total of 8.00 from holding Franklin Lifesmart Retirement or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Income Fund Of
Performance |
| Timeline |
| Franklin Lifesmart |
| Income Fund |
Franklin Lifesmart and Income Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Income Fund
The main advantage of trading using opposite Franklin Lifesmart and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Income Fund 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 Income Fund will offset losses from the drop in Income Fund's long position.| Franklin Lifesmart vs. Jhancock Real Estate | Franklin Lifesmart vs. Vy Clarion Real | Franklin Lifesmart vs. Amg Managers Centersquare | Franklin Lifesmart vs. Simt Real Estate |
| Income Fund vs. Transamerica Cleartrack Retirement | Income Fund vs. Putnman Retirement Ready | Income Fund vs. Wilmington Trust Retirement | Income Fund vs. Franklin Lifesmart Retirement |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| 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 | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |