Correlation Between Six Circles and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Six Circles 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 Six Circles and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Six Circles Global and Templeton Global Bond, you can compare the effects of market volatilities on Six Circles 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 Six Circles with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Six Circles and Templeton Global.
Diversification Opportunities for Six Circles and Templeton Global
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Six and Templeton is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Six Circles Global and Templeton Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Bond and Six Circles 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 Six Circles Global 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 Bond has no effect on the direction of Six Circles i.e., Six Circles and Templeton Global go up and down completely randomly.
Pair Corralation between Six Circles and Templeton Global
Assuming the 90 days horizon Six Circles Global is expected to generate 0.51 times more return on investment than Templeton Global. However, Six Circles Global is 1.96 times less risky than Templeton Global. It trades about 0.09 of its potential returns per unit of risk. Templeton Global Bond is currently generating about -0.03 per unit of risk. If you would invest 808.00 in Six Circles Global on September 2, 2024 and sell it today you would earn a total of 53.00 from holding Six Circles Global or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Six Circles Global vs. Templeton Global Bond
Performance |
| Timeline |
| Six Circles Global |
| Templeton Global Bond |
Six Circles and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Six Circles and Templeton Global
The main advantage of trading using opposite Six Circles and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Circles 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.| Six Circles vs. Six Circles Ultra | Six Circles vs. Six Circles Tax | Six Circles vs. Six Circles Unconstrained | Six Circles vs. Six Circles International |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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