Correlation Between Templeton China and Spirit Of
Can any of the company-specific risk be diversified away by investing in both Templeton China and Spirit Of 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 China and Spirit Of into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton China World and Spirit Of America, you can compare the effects of market volatilities on Templeton China and Spirit Of 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 China with a short position of Spirit Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton China and Spirit Of.
Diversification Opportunities for Templeton China and Spirit Of
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and Spirit is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Templeton China World and Spirit Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirit Of America and Templeton China 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 China World are associated (or correlated) with Spirit Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirit Of America has no effect on the direction of Templeton China i.e., Templeton China and Spirit Of go up and down completely randomly.
Pair Corralation between Templeton China and Spirit Of
Assuming the 90 days horizon Templeton China World is expected to under-perform the Spirit Of. In addition to that, Templeton China is 4.02 times more volatile than Spirit Of America. It trades about -0.01 of its total potential returns per unit of risk. Spirit Of America is currently generating about 0.04 per unit of volatility. If you would invest 962.00 in Spirit Of America on September 2, 2024 and sell it today you would earn a total of 86.00 from holding Spirit Of America or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.16% |
| Values | Daily Returns |
Templeton China World vs. Spirit Of America
Performance |
| Timeline |
| Templeton China World |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Spirit Of America |
Templeton China and Spirit Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton China and Spirit Of
The main advantage of trading using opposite Templeton China and Spirit Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton China position performs unexpectedly, Spirit Of 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 Spirit Of will offset losses from the drop in Spirit Of's long position.| Templeton China vs. Dreyfus Institutional Reserves | Templeton China vs. Cref Money Market | Templeton China vs. Lord Abbett Govt | Templeton China vs. Franklin Government Money |
| Spirit Of vs. Spirit Of America | Spirit Of vs. Spirit Of America | Spirit Of vs. Spirit Of America | Spirit Of vs. Spirit Of America |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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