Correlation Between Rreef Property and Franklin Lifesmart

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Can any of the company-specific risk be diversified away by investing in both Rreef Property 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 Rreef Property and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rreef Property Trust and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Rreef Property 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 Rreef Property with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rreef Property and Franklin Lifesmart.

Diversification Opportunities for Rreef Property and Franklin Lifesmart

RreefFranklinDiversified AwayRreefFranklinDiversified Away100%
0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between Rreef and Franklin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Rreef Property Trust and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Rreef Property 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 Rreef Property Trust 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 has no effect on the direction of Rreef Property i.e., Rreef Property and Franklin Lifesmart go up and down completely randomly.

Pair Corralation between Rreef Property and Franklin Lifesmart

Assuming the 90 days trading horizon Rreef Property Trust is expected to under-perform the Franklin Lifesmart. But the fund apears to be less risky and, when comparing its historical volatility, Rreef Property Trust is 1.32 times less risky than Franklin Lifesmart. The fund trades about -0.08 of its potential returns per unit of risk. The Franklin Lifesmart Retirement is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  885.00  in Franklin Lifesmart Retirement on November 22, 2024 and sell it today you would earn a total of  190.00  from holding Franklin Lifesmart Retirement or generate 21.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.39%
ValuesDaily Returns

Rreef Property Trust  vs.  Franklin Lifesmart Retirement

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -3-2-10
JavaScript chart by amCharts 3.21.15ZRPTUX FLMTX
       Timeline  
Rreef Property Trust 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Rreef Property Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Rreef Property is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb13.2613.2813.313.3213.3413.3613.3813.413.42
Franklin Lifesmart 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Lifesmart Retirement are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Franklin Lifesmart is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb10.410.4510.510.5510.610.6510.710.75

Rreef Property and Franklin Lifesmart Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.49-0.29-0.0992-0.0531-0.0069220.03920.08540.230.430.63 2468101214
JavaScript chart by amCharts 3.21.15ZRPTUX FLMTX
       Returns  

Pair Trading with Rreef Property and Franklin Lifesmart

The main advantage of trading using opposite Rreef Property and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rreef Property 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.
The idea behind Rreef Property Trust and Franklin Lifesmart Retirement pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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