Correlation Between Franklin Lifesmart and Guidepath Conservative
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Guidepath Conservative 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 Guidepath Conservative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Lifesmart Retirement and Guidepath Conservative Income, you can compare the effects of market volatilities on Franklin Lifesmart and Guidepath Conservative 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 Guidepath Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Guidepath Conservative.
Diversification Opportunities for Franklin Lifesmart and Guidepath Conservative
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Guidepath is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Guidepath Conservative Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Conservative 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 Retirement are associated (or correlated) with Guidepath Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Conservative has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Guidepath Conservative go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Guidepath Conservative
Assuming the 90 days horizon Franklin Lifesmart Retirement is expected to generate 7.51 times more return on investment than Guidepath Conservative. However, Franklin Lifesmart is 7.51 times more volatile than Guidepath Conservative Income. It trades about 0.12 of its potential returns per unit of risk. Guidepath Conservative Income is currently generating about 0.31 per unit of risk. If you would invest 1,084 in Franklin Lifesmart Retirement on September 10, 2025 and sell it today you would earn a total of 23.00 from holding Franklin Lifesmart Retirement or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Guidepath Conservative Income
Performance |
| Timeline |
| Franklin Lifesmart |
| Guidepath Conservative |
Franklin Lifesmart and Guidepath Conservative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Guidepath Conservative
The main advantage of trading using opposite Franklin Lifesmart and Guidepath Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Guidepath Conservative 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 Guidepath Conservative will offset losses from the drop in Guidepath Conservative's long position.| Franklin Lifesmart vs. Guidemark Large Cap | Franklin Lifesmart vs. Fidelity Large Cap | Franklin Lifesmart vs. Pace Large Value | Franklin Lifesmart vs. American Mutual Fund |
| Guidepath Conservative vs. Ab Government Exchange | Guidepath Conservative vs. Rmb Mendon Financial | Guidepath Conservative vs. Cref Money Market | Guidepath Conservative vs. Transamerica Financial Life |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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