Correlation Between Enhanced Fixed and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Enhanced Fixed and Templeton Global 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 Enhanced Fixed and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enhanced Fixed Income and Templeton Global Smaller, you can compare the effects of market volatilities on Enhanced Fixed and Templeton Global 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 Enhanced Fixed with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enhanced Fixed and Templeton Global.
Diversification Opportunities for Enhanced Fixed and Templeton Global
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enhanced and Templeton is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Enhanced Fixed Income and Templeton Global Smaller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Smaller and Enhanced Fixed 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 Enhanced Fixed Income are associated (or correlated) with Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Smaller has no effect on the direction of Enhanced Fixed i.e., Enhanced Fixed and Templeton Global go up and down completely randomly.
Pair Corralation between Enhanced Fixed and Templeton Global
Assuming the 90 days horizon Enhanced Fixed Income is expected to generate 0.52 times more return on investment than Templeton Global. However, Enhanced Fixed Income is 1.91 times less risky than Templeton Global. It trades about -0.28 of its potential returns per unit of risk. Templeton Global Smaller is currently generating about -0.48 per unit of risk. If you would invest 1,021 in Enhanced Fixed Income on October 9, 2024 and sell it today you would lose (23.00) from holding Enhanced Fixed Income or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enhanced Fixed Income vs. Templeton Global Smaller
Performance |
| Timeline |
| Enhanced Fixed Income |
| Templeton Global Smaller |
Enhanced Fixed and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enhanced Fixed and Templeton Global
The main advantage of trading using opposite Enhanced Fixed and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enhanced Fixed position performs unexpectedly, Templeton Global 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 Templeton Global will offset losses from the drop in Templeton Global's long position.| Enhanced Fixed vs. Simt Multi Asset Accumulation | Enhanced Fixed vs. Saat Market Growth | Enhanced Fixed vs. Simt Real Return | Enhanced Fixed vs. Simt Small Cap |
| Templeton Global vs. Franklin Mutual Beacon | Templeton Global vs. Templeton Developing Markets | Templeton Global vs. Franklin Mutual Global | Templeton Global vs. Franklin Mutual Global |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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