Correlation Between Janus High and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Janus High and Franklin Lifesmart 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 Janus High and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Janus High Yield Fund and Franklin Lifesmart 2050, you can compare the effects of market volatilities on Janus High and Franklin Lifesmart 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 Janus High with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus High and Franklin Lifesmart.
Diversification Opportunities for Janus High and Franklin Lifesmart
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Janus and Franklin is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Janus High Yield Fund and Franklin Lifesmart 2050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2050 and Janus High 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 Janus High Yield Fund are associated (or correlated) with Franklin Lifesmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Lifesmart 2050 has no effect on the direction of Janus High i.e., Janus High and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Janus High and Franklin Lifesmart
Assuming the 90 days horizon Janus High Yield Fund is expected to generate 0.18 times more return on investment than Franklin Lifesmart. However, Janus High Yield Fund is 5.55 times less risky than Franklin Lifesmart. It trades about -0.36 of its potential returns per unit of risk. Franklin Lifesmart 2050 is currently generating about -0.2 per unit of risk. If you would invest 743.00 in Janus High Yield Fund on October 9, 2024 and sell it today you would lose (8.00) from holding Janus High Yield Fund or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Janus High Yield Fund vs. Franklin Lifesmart 2050
Performance |
| Timeline |
| Janus High Yield |
| Franklin Lifesmart 2050 |
Janus High and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus High and Franklin Lifesmart
The main advantage of trading using opposite Janus High and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus High position performs unexpectedly, Franklin Lifesmart 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 Lifesmart will offset losses from the drop in Franklin Lifesmart's long position.| Janus High vs. Janus Henderson High Yield | Janus High vs. Janus Flexible Bond | Janus High vs. Intech Managed Volatility | Janus High vs. Janus Trarian Fund |
| Franklin Lifesmart vs. Thrivent Diversified Income | Franklin Lifesmart vs. Victory Diversified Stock | Franklin Lifesmart vs. Pimco Diversified Income | Franklin Lifesmart vs. Voya Solution Conservative |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |