Correlation Between Europac International and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Europac International 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 Europac International and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europac International Bond and Templeton Global Bond, you can compare the effects of market volatilities on Europac International 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 Europac International with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac International and Templeton Global.
Diversification Opportunities for Europac International and Templeton Global
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Europac and Templeton is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Europac International Bond 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 Europac International 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 Europac International Bond 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 Europac International i.e., Europac International and Templeton Global go up and down completely randomly.
Pair Corralation between Europac International and Templeton Global
Assuming the 90 days horizon Europac International Bond is expected to generate 0.61 times more return on investment than Templeton Global. However, Europac International Bond is 1.63 times less risky than Templeton Global. It trades about -0.02 of its potential returns per unit of risk. Templeton Global Bond is currently generating about -0.04 per unit of risk. If you would invest 848.00 in Europac International Bond on September 12, 2024 and sell it today you would lose (17.00) from holding Europac International Bond or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europac International Bond vs. Templeton Global Bond
Performance |
| Timeline |
| Europac International |
| Templeton Global Bond |
Europac International and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europac International and Templeton Global
The main advantage of trading using opposite Europac International and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europac International 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.| Europac International vs. Templeton Global Bond | Europac International vs. Templeton Global Bond | Europac International vs. Capital World Bond | Europac International vs. Capital World Bond |
| Templeton Global vs. Templeton Global Bond | Templeton Global vs. Capital World Bond | Templeton Global vs. Capital World Bond | Templeton Global vs. Capital World Bond |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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