Correlation Between Templeton Global and Pimco Foreign
Can any of the company-specific risk be diversified away by investing in both Templeton Global and Pimco 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 Templeton Global and Pimco Foreign into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Global Bond and Pimco Foreign Bond, you can compare the effects of market volatilities on Templeton Global and Pimco 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 Templeton Global with a short position of Pimco Foreign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Pimco Foreign.
Diversification Opportunities for Templeton Global and Pimco Foreign
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Templeton and Pimco is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Bond and Pimco Foreign Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Foreign Bond and Templeton 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 Templeton Global Bond are associated (or correlated) with Pimco Foreign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Foreign Bond has no effect on the direction of Templeton Global i.e., Templeton Global and Pimco Foreign go up and down completely randomly.
Pair Corralation between Templeton Global and Pimco Foreign
Assuming the 90 days horizon Templeton Global Bond is expected to under-perform the Pimco Foreign. In addition to that, Templeton Global is 1.3 times more volatile than Pimco Foreign Bond. It trades about -0.04 of its total potential returns per unit of risk. Pimco Foreign Bond is currently generating about 0.0 per unit of volatility. If you would invest 736.00 in Pimco Foreign Bond on October 9, 2024 and sell it today you would earn a total of 0.00 from holding Pimco Foreign Bond or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Global Bond vs. Pimco Foreign Bond
Performance |
| Timeline |
| Templeton Global Bond |
| Pimco Foreign Bond |
Templeton Global and Pimco Foreign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Pimco Foreign
The main advantage of trading using opposite Templeton Global and Pimco Foreign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, Pimco 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 Pimco Foreign will offset losses from the drop in Pimco Foreign's long position.| Templeton Global vs. Alternative Asset Allocation | Templeton Global vs. Aqr Large Cap | Templeton Global vs. Transamerica Asset Allocation | Templeton Global vs. Calvert Moderate Allocation |
| Pimco Foreign vs. Federated Global Allocation | Pimco Foreign vs. Harding Loevner Global | Pimco Foreign vs. Commonwealth Global Fund | Pimco Foreign vs. Ms Global Fixed |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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