Correlation Between Bitcoin and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Bitcoin 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 Bitcoin and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Templeton Global Balanced, you can compare the effects of market volatilities on Bitcoin 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 Bitcoin with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Templeton Global.
Diversification Opportunities for Bitcoin and Templeton Global
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bitcoin and Templeton is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Templeton Global Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Balanced and Bitcoin 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 Bitcoin 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 Balanced has no effect on the direction of Bitcoin i.e., Bitcoin and Templeton Global go up and down completely randomly.
Pair Corralation between Bitcoin and Templeton Global
Assuming the 90 days trading horizon Bitcoin is expected to under-perform the Templeton Global. In addition to that, Bitcoin is 4.0 times more volatile than Templeton Global Balanced. It trades about -0.08 of its total potential returns per unit of risk. Templeton Global Balanced is currently generating about 0.23 per unit of volatility. If you would invest 238.00 in Templeton Global Balanced on December 11, 2024 and sell it today you would earn a total of 13.00 from holding Templeton Global Balanced or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bitcoin vs. Templeton Global Balanced
Performance |
| Timeline |
| Bitcoin |
| Templeton Global Balanced |
Bitcoin and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Templeton Global
The main advantage of trading using opposite Bitcoin and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin 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.The idea behind Bitcoin and Templeton Global Balanced 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.| Templeton Global vs. Capital Management Mid Cap | Templeton Global vs. Nuveen Nwq Small Cap | Templeton Global vs. Federated Mdt Mid Cap | Templeton Global vs. Blackrock Mid Cap Growth |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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