Correlation Between Franklin Lifesmart and Multi Manager
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Multi Manager 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 Multi Manager 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 Multi Manager Global Listed, you can compare the effects of market volatilities on Franklin Lifesmart and Multi Manager 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 Multi Manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Multi Manager.
Diversification Opportunities for Franklin Lifesmart and Multi Manager
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Multi is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Multi Manager Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager Global 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 Multi Manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager Global has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Multi Manager go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Multi Manager
Assuming the 90 days horizon Franklin Lifesmart Retirement is expected to generate 0.47 times more return on investment than Multi Manager. However, Franklin Lifesmart Retirement is 2.14 times less risky than Multi Manager. It trades about 0.12 of its potential returns per unit of risk. Multi Manager Global Listed is currently generating about 0.05 per unit of risk. If you would invest 919.00 in Franklin Lifesmart Retirement on September 12, 2024 and sell it today you would earn a total of 145.00 from holding Franklin Lifesmart Retirement or generate 15.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Multi Manager Global Listed
Performance |
| Timeline |
| Franklin Lifesmart |
| Multi Manager Global |
Franklin Lifesmart and Multi Manager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Multi Manager
The main advantage of trading using opposite Franklin Lifesmart and Multi Manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Multi Manager 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 Multi Manager will offset losses from the drop in Multi Manager's long position.| Franklin Lifesmart vs. Jpmorgan Smartretirement Income | Franklin Lifesmart vs. HUMANA INC | Franklin Lifesmart vs. Barloworld Ltd ADR | Franklin Lifesmart vs. Morningstar Unconstrained Allocation |
| Multi Manager vs. Saat Moderate Strategy | Multi Manager vs. Franklin Lifesmart Retirement | Multi Manager vs. Dimensional Retirement Income | Multi Manager vs. Fidelity Managed 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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