Correlation Between Franklin Lifesmart and Us Small
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Us Small 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 Us Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Lifesmart 2060 and Us Small Cap, you can compare the effects of market volatilities on Franklin Lifesmart and Us Small 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 Us Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Us Small.
Diversification Opportunities for Franklin Lifesmart and Us Small
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and DFSVX is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart 2060 and Us Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Small Cap 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 2060 are associated (or correlated) with Us Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Small Cap has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Us Small go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Us Small
Assuming the 90 days horizon Franklin Lifesmart 2060 is expected to generate 0.61 times more return on investment than Us Small. However, Franklin Lifesmart 2060 is 1.64 times less risky than Us Small. It trades about 0.12 of its potential returns per unit of risk. Us Small Cap is currently generating about 0.03 per unit of risk. If you would invest 1,315 in Franklin Lifesmart 2060 on September 5, 2025 and sell it today you would earn a total of 71.00 from holding Franklin Lifesmart 2060 or generate 5.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart 2060 vs. Us Small Cap
Performance |
| Timeline |
| Franklin Lifesmart 2060 |
| Us Small Cap |
Franklin Lifesmart and Us Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Us Small
The main advantage of trading using opposite Franklin Lifesmart and Us Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Us Small 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 Us Small will offset losses from the drop in Us Small's long position.| Franklin Lifesmart vs. Franklin Mutual Beacon | Franklin Lifesmart vs. Templeton Developing Markets | Franklin Lifesmart vs. Franklin Mutual Global | Franklin Lifesmart vs. Franklin Mutual Global |
| Us Small vs. T Rowe Price | Us Small vs. Franklin Lifesmart 2060 | Us Small vs. T Rowe Price | Us Small vs. Hood River New |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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