Correlation Between Franklin Lifesmart and Zevenbergen Growth
Can any of the company-specific risk be diversified away by investing in both Franklin Lifesmart and Zevenbergen Growth 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 Zevenbergen Growth 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 Zevenbergen Growth Fund, you can compare the effects of market volatilities on Franklin Lifesmart and Zevenbergen Growth 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 Zevenbergen Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Lifesmart and Zevenbergen Growth.
Diversification Opportunities for Franklin Lifesmart and Zevenbergen Growth
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Zevenbergen is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Lifesmart Retirement and Zevenbergen Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zevenbergen Growth 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 Zevenbergen Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zevenbergen Growth has no effect on the direction of Franklin Lifesmart i.e., Franklin Lifesmart and Zevenbergen Growth go up and down completely randomly.
Pair Corralation between Franklin Lifesmart and Zevenbergen Growth
Assuming the 90 days horizon Franklin Lifesmart is expected to generate 4.06 times less return on investment than Zevenbergen Growth. But when comparing it to its historical volatility, Franklin Lifesmart Retirement is 4.45 times less risky than Zevenbergen Growth. It trades about 0.11 of its potential returns per unit of risk. Zevenbergen Growth Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,924 in Zevenbergen Growth Fund on September 14, 2024 and sell it today you would earn a total of 1,227 from holding Zevenbergen Growth Fund or generate 41.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Lifesmart Retirement vs. Zevenbergen Growth Fund
Performance |
| Timeline |
| Franklin Lifesmart |
| Zevenbergen Growth |
Franklin Lifesmart and Zevenbergen Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Lifesmart and Zevenbergen Growth
The main advantage of trading using opposite Franklin Lifesmart and Zevenbergen Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Lifesmart position performs unexpectedly, Zevenbergen Growth 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 Zevenbergen Growth will offset losses from the drop in Zevenbergen Growth'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 |
| Zevenbergen Growth vs. Arrow Managed Futures | Zevenbergen Growth vs. Ab Bond Inflation | Zevenbergen Growth vs. Guggenheim Managed Futures | Zevenbergen Growth vs. Simt Multi Asset Inflation |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |