Correlation Between Franklin Lifesmart and Jpmorgan Hedged
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Jpmorgan Hedged 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 Jpmorgan Hedged 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 Jpmorgan Hedged Equity, you can compare the effects of market volatilities on Franklin Lifesmart and Jpmorgan Hedged 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 Jpmorgan Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Jpmorgan Hedged.
Diversification Opportunities for Franklin Lifesmart and Jpmorgan Hedged
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Jpmorgan is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Jpmorgan Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Hedged Equity 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 Jpmorgan Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Hedged Equity has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Jpmorgan Hedged go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Jpmorgan Hedged
Assuming the 90 days horizon Franklin Lifesmart Retirement is expected to generate 0.57 times more return on investment than Jpmorgan Hedged. However, Franklin Lifesmart Retirement is 1.76 times less risky than Jpmorgan Hedged. It trades about 0.19 of its potential returns per unit of risk. Jpmorgan Hedged Equity is currently generating about 0.08 per unit of risk. If you would invest 1,050 in Franklin Lifesmart Retirement on August 31, 2024 and sell it today you would earn a total of 13.00 from holding Franklin Lifesmart Retirement or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Jpmorgan Hedged Equity
Performance |
| Timeline |
| Franklin Lifesmart |
| Jpmorgan Hedged Equity |
Franklin Lifesmart and Jpmorgan Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Jpmorgan Hedged
The main advantage of trading using opposite Franklin Lifesmart and Jpmorgan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Jpmorgan Hedged 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 Jpmorgan Hedged will offset losses from the drop in Jpmorgan Hedged's long position.| Franklin Lifesmart vs. Vanguard Target Retirement | Franklin Lifesmart vs. Jpmorgan Smartretirement Income | Franklin Lifesmart vs. HUMANA INC | Franklin Lifesmart vs. Aquagold International |
| Jpmorgan Hedged vs. Pro Blend Moderate Term | Jpmorgan Hedged vs. Multimanager Lifestyle Moderate | Jpmorgan Hedged vs. Tiaa Cref Lifestyle Moderate | Jpmorgan Hedged 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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