Correlation Between Franklin Lifesmart and Hartford Checks
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Hartford Checks 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 Hartford Checks 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 The Hartford Checks, you can compare the effects of market volatilities on Franklin Lifesmart and Hartford Checks 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 Hartford Checks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Hartford Checks.
Diversification Opportunities for Franklin Lifesmart and Hartford Checks
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Hartford is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and The Hartford Checks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Checks 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 Hartford Checks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Checks has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Hartford Checks go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Hartford Checks
Assuming the 90 days horizon Franklin Lifesmart Retirement is expected to generate 0.68 times more return on investment than Hartford Checks. However, Franklin Lifesmart Retirement is 1.46 times less risky than Hartford Checks. It trades about 0.27 of its potential returns per unit of risk. The Hartford Checks is currently generating about 0.09 per unit of risk. If you would invest 1,055 in Franklin Lifesmart Retirement on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Franklin Lifesmart Retirement or generate 1.14% 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. The Hartford Checks
Performance |
| Timeline |
| Franklin Lifesmart |
| Hartford Checks |
Franklin Lifesmart and Hartford Checks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Hartford Checks
The main advantage of trading using opposite Franklin Lifesmart and Hartford Checks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Hartford Checks 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 Hartford Checks will offset losses from the drop in Hartford Checks' 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 |
| Hartford Checks vs. The Hartford Growth | Hartford Checks vs. The Hartford Growth | Hartford Checks vs. The Hartford Growth | Hartford Checks vs. The Hartford Growth |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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