Correlation Between Franklin Lifesmart and Franklin Dynatech
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Franklin Dynatech 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 Franklin Dynatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Lifesmart 2025 and Franklin Dynatech Fund, you can compare the effects of market volatilities on Franklin Lifesmart and Franklin Dynatech 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 Franklin Dynatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Franklin Dynatech.
Diversification Opportunities for Franklin Lifesmart and Franklin Dynatech
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Franklin is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart 2025 and Franklin Dynatech Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Dynatech 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 2025 are associated (or correlated) with Franklin Dynatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Dynatech has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Franklin Dynatech go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Franklin Dynatech
Assuming the 90 days horizon Franklin Lifesmart is expected to generate 2.27 times less return on investment than Franklin Dynatech. But when comparing it to its historical volatility, Franklin Lifesmart 2025 is 2.87 times less risky than Franklin Dynatech. It trades about 0.09 of its potential returns per unit of risk. Franklin Dynatech Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 14,635 in Franklin Dynatech Fund on September 3, 2024 and sell it today you would earn a total of 2,205 from holding Franklin Dynatech Fund or generate 15.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart 2025 vs. Franklin Dynatech Fund
Performance |
| Timeline |
| Franklin Lifesmart 2025 |
| Franklin Dynatech |
Franklin Lifesmart and Franklin Dynatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Franklin Dynatech
The main advantage of trading using opposite Franklin Lifesmart and Franklin Dynatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Franklin Dynatech 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 Franklin Dynatech will offset losses from the drop in Franklin Dynatech's long position.| Franklin Lifesmart vs. Vanguard Target Retirement | Franklin Lifesmart vs. American Funds 2025 | Franklin Lifesmart vs. American Funds 2025 | Franklin Lifesmart vs. American Funds 2025 |
| Franklin Dynatech vs. Aam Select Income | Franklin Dynatech vs. Volumetric Fund Volumetric | Franklin Dynatech vs. Bbh Intermediate Municipal | Franklin Dynatech vs. Scharf Global Opportunity |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |