Correlation Between High-yield Municipal and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both High-yield Municipal and Templeton 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 High-yield Municipal and Templeton Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Municipal Fund and Templeton Growth Fund, you can compare the effects of market volatilities on High-yield Municipal and Templeton 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 High-yield Municipal with a short position of Templeton Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of High-yield Municipal and Templeton Growth.
Diversification Opportunities for High-yield Municipal and Templeton Growth
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between High-yield and Templeton is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Growth and High-yield Municipal 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 High Yield Municipal Fund are associated (or correlated) with Templeton Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Growth has no effect on the direction of High-yield Municipal i.e., High-yield Municipal and Templeton Growth go up and down completely randomly.
Pair Corralation between High-yield Municipal and Templeton Growth
Assuming the 90 days horizon High Yield Municipal Fund is expected to under-perform the Templeton Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, High Yield Municipal Fund is 1.82 times less risky than Templeton Growth. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Templeton Growth Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,761 in Templeton Growth Fund on September 3, 2024 and sell it today you would earn a total of 42.00 from holding Templeton Growth Fund or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Municipal Fund vs. Templeton Growth Fund
Performance |
| Timeline |
| High Yield Municipal |
| Templeton Growth |
High-yield Municipal and Templeton Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High-yield Municipal and Templeton Growth
The main advantage of trading using opposite High-yield Municipal and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High-yield Municipal position performs unexpectedly, Templeton 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 Templeton Growth will offset losses from the drop in Templeton Growth's long position.| High-yield Municipal vs. High Yield Fund Investor | High-yield Municipal vs. Intermediate Term Tax Free Bond | High-yield Municipal vs. California High Yield Municipal | High-yield Municipal vs. T Rowe Price |
| Templeton Growth vs. Boston Partners Small | Templeton Growth vs. American Century Etf | Templeton Growth vs. Fpa Queens Road | Templeton Growth vs. Ultrasmall Cap Profund Ultrasmall Cap |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |