Correlation Between Franklin Lifesmart and Mfs International
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Mfs International 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 Mfs International 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 Mfs International New, you can compare the effects of market volatilities on Franklin Lifesmart and Mfs International 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 Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Mfs International.
Diversification Opportunities for Franklin Lifesmart and Mfs International
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Mfs is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Mfs International New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International New 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 Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International New has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Mfs International go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Mfs International
Assuming the 90 days horizon Franklin Lifesmart Retirement is expected to generate 0.49 times more return on investment than Mfs International. However, Franklin Lifesmart Retirement is 2.02 times less risky than Mfs International. It trades about 0.1 of its potential returns per unit of risk. Mfs International New is currently generating about 0.01 per unit of risk. If you would invest 880.00 in Franklin Lifesmart Retirement on November 27, 2024 and sell it today you would earn a total of 170.00 from holding Franklin Lifesmart Retirement or generate 19.32% 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. Mfs International New
Performance |
| Timeline |
| Franklin Lifesmart |
| Mfs International New |
Franklin Lifesmart and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Mfs International
The main advantage of trading using opposite Franklin Lifesmart and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Mfs International 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 Mfs International will offset losses from the drop in Mfs International's long position.| Franklin Lifesmart vs. Ab Bond Inflation | Franklin Lifesmart vs. Gmo High Yield | Franklin Lifesmart vs. Doubleline Emerging Markets | Franklin Lifesmart vs. Ms Global Fixed |
| Mfs International vs. First Eagle Gold | Mfs International vs. World Precious Minerals | Mfs International vs. Gabelli Gold Fund | Mfs International vs. Franklin Gold Precious |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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