Correlation Between Templeton Growth and Lifestyle

Can any of the company-specific risk be diversified away by investing in both Templeton Growth and Lifestyle 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 Templeton Growth and Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Templeton Growth Fund and Lifestyle Ii Growth, you can compare the effects of market volatilities on Templeton Growth and Lifestyle 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 Templeton Growth with a short position of Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Growth and Lifestyle.

Diversification Opportunities for Templeton Growth and Lifestyle

0.98

Correlation Coefficient

Templeton Growth  Lifestyle

Almost no diversification

The 3 months correlation between Templeton and Lifestyle is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Growth Fund and Lifestyle Ii Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifestyle Ii Growth and Templeton Growth 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 Templeton Growth Fund are associated (or correlated) with Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifestyle Ii Growth has no effect on the direction of Templeton Growth i.e., Templeton Growth and Lifestyle go up and down completely randomly.

Pair Corralation between Templeton Growth and Lifestyle

Assuming the 90 days horizon Templeton Growth Fund is expected to generate 1.19 times more return on investment than Lifestyle. However, Templeton Growth is 1.19 times more volatile than Lifestyle Ii Growth. It trades about 0.25 of its potential returns per unit of risk. Lifestyle Ii Growth is currently generating about 0.24 per unit of risk. If you would invest  2,651  in Templeton Growth Fund on May 7, 2025 and sell it today you would earn a total of  288.00  from holding Templeton Growth Fund or generate 10.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Templeton Growth Fund  vs.  Lifestyle Ii Growth

Templeton Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Templeton Growth Fund are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Templeton Growth may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Lifestyle Ii Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lifestyle Ii Growth are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lifestyle may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Templeton Growth and Lifestyle

The main advantage of trading using opposite Templeton Growth and Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Growth position performs unexpectedly, Lifestyle 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 Lifestyle will offset losses from the drop in Lifestyle's long position.

The idea behind Templeton Growth Fund and Lifestyle Ii Growth 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.