Correlation Between Ab Global and Templeton Foreign
Can any of the company-specific risk be diversified away by investing in both Ab Global and Templeton Foreign 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 Ab Global and Templeton Foreign into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Bond and Templeton Foreign Fund, you can compare the effects of market volatilities on Ab Global and Templeton Foreign 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 Ab Global with a short position of Templeton Foreign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Templeton Foreign.
Diversification Opportunities for Ab Global and Templeton Foreign
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ANAGX and Templeton is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Templeton Foreign Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Foreign and Ab Global 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 Ab Global Bond are associated (or correlated) with Templeton Foreign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Foreign has no effect on the direction of Ab Global i.e., Ab Global and Templeton Foreign go up and down completely randomly.
Pair Corralation between Ab Global and Templeton Foreign
Assuming the 90 days horizon Ab Global is expected to generate 1.89 times less return on investment than Templeton Foreign. But when comparing it to its historical volatility, Ab Global Bond is 3.91 times less risky than Templeton Foreign. It trades about 0.06 of its potential returns per unit of risk. Templeton Foreign Fund is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 731.00 in Templeton Foreign Fund on November 3, 2024 and sell it today you would earn a total of 41.00 from holding Templeton Foreign Fund or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Bond vs. Templeton Foreign Fund
Performance |
| Timeline |
| Ab Global Bond |
| Templeton Foreign |
Ab Global and Templeton Foreign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Templeton Foreign
The main advantage of trading using opposite Ab Global and Templeton Foreign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Templeton Foreign 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 Foreign will offset losses from the drop in Templeton Foreign's long position.| Ab Global vs. Forum Real Estate | Ab Global vs. Simt Real Estate | Ab Global vs. Nexpoint Real Estate | Ab Global vs. Amg Managers Centersquare |
| Templeton Foreign vs. Dodge Cox International | Templeton Foreign vs. Oakmark International Fund | Templeton Foreign vs. Dodge International Stock | Templeton Foreign vs. Oakmark International Fund |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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