Correlation Between Leggmason Partners and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Leggmason Partners 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 Leggmason Partners and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leggmason Partners Institutional and Franklin Lifesmart 2045, you can compare the effects of market volatilities on Leggmason Partners 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 Leggmason Partners with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leggmason Partners and Franklin Lifesmart.
Diversification Opportunities for Leggmason Partners and Franklin Lifesmart
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Leggmason and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Leggmason Partners Institution and Franklin Lifesmart 2045 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2045 and Leggmason Partners 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 Leggmason Partners Institutional 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 2045 has no effect on the direction of Leggmason Partners i.e., Leggmason Partners and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Leggmason Partners and Franklin Lifesmart
If you would invest 97.00 in Leggmason Partners Institutional on September 4, 2024 and sell it today you would earn a total of 3.00 from holding Leggmason Partners Institutional or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Leggmason Partners Institution vs. Franklin Lifesmart 2045
Performance |
| Timeline |
| Leggmason Partners |
| Franklin Lifesmart 2045 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Leggmason Partners and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leggmason Partners and Franklin Lifesmart
The main advantage of trading using opposite Leggmason Partners and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leggmason Partners 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.| Leggmason Partners vs. Smallcap Growth Fund | Leggmason Partners vs. Eip Growth And | Leggmason Partners vs. Chase Growth Fund | Leggmason Partners vs. Pace Large Growth |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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