Correlation Between Barings Active and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both Barings Active 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 Barings Active and Templeton Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Templeton Growth Fund, you can compare the effects of market volatilities on Barings Active 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 Barings Active with a short position of Templeton Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Templeton Growth.
Diversification Opportunities for Barings Active and Templeton Growth
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barings and Templeton is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Growth and Barings Active 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 Barings Active Short 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 Barings Active i.e., Barings Active and Templeton Growth go up and down completely randomly.
Pair Corralation between Barings Active and Templeton Growth
Assuming the 90 days horizon Barings Active Short is expected to generate 0.11 times more return on investment than Templeton Growth. However, Barings Active Short is 9.39 times less risky than Templeton Growth. It trades about 0.12 of its potential returns per unit of risk. Templeton Growth Fund is currently generating about -0.15 per unit of risk. If you would invest 923.00 in Barings Active Short on September 15, 2024 and sell it today you would earn a total of 2.00 from holding Barings Active Short or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Templeton Growth Fund
Performance |
| Timeline |
| Barings Active Short |
| Templeton Growth |
Barings Active and Templeton Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Templeton Growth
The main advantage of trading using opposite Barings Active and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active 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.| Barings Active vs. Barings Emerging Markets | Barings Active vs. Barings Emerging Markets | Barings Active vs. Barings Active Short | Barings Active vs. Barings Global Floating |
| Templeton Growth vs. Hsbc Government Money | Templeton Growth vs. Virtus Seix Government | Templeton Growth vs. Jpmorgan Government Bond | Templeton Growth vs. Franklin Adjustable Government |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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