Correlation Between Massmutual Premier and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier 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 Massmutual Premier and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Premier Diversified and Franklin Lifesmart 2055, you can compare the effects of market volatilities on Massmutual Premier 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 Massmutual Premier with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Franklin Lifesmart.
Diversification Opportunities for Massmutual Premier and Franklin Lifesmart
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Massmutual and Franklin is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Franklin Lifesmart 2055 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2055 and Massmutual Premier 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 Massmutual Premier Diversified 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 2055 has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Massmutual Premier and Franklin Lifesmart
Assuming the 90 days horizon Massmutual Premier Diversified is expected to under-perform the Franklin Lifesmart. But the mutual fund apears to be less risky and, when comparing its historical volatility, Massmutual Premier Diversified is 1.79 times less risky than Franklin Lifesmart. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Franklin Lifesmart 2055 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,386 in Franklin Lifesmart 2055 on August 30, 2024 and sell it today you would earn a total of 8.00 from holding Franklin Lifesmart 2055 or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Premier Diversified vs. Franklin Lifesmart 2055
Performance |
| Timeline |
| Massmutual Premier |
| Franklin Lifesmart 2055 |
Massmutual Premier and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Franklin Lifesmart
The main advantage of trading using opposite Massmutual Premier and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier 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.| Massmutual Premier vs. Massmutual Select Mid | Massmutual Premier vs. Massmutual Select Mid Cap | Massmutual Premier vs. Massmutual Select Mid Cap | Massmutual Premier vs. Massmutual Select Mid Cap |
| Franklin Lifesmart vs. Huber Capital Diversified | Franklin Lifesmart vs. Sentinel Small Pany | Franklin Lifesmart vs. Tiaa Cref Small Cap Blend | Franklin Lifesmart vs. Massmutual Premier Diversified |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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