Correlation Between Templeton Global and Global Bond
Can any of the company-specific risk be diversified away by investing in both Templeton Global and Global Bond 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 Global Bond 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 Global Bond Fund, you can compare the effects of market volatilities on Templeton Global and Global Bond 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 Global Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Global Bond.
Diversification Opportunities for Templeton Global and Global Bond
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Templeton and Global is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Bond and Global Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Bond Fund 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 Global Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Bond Fund has no effect on the direction of Templeton Global i.e., Templeton Global and Global Bond go up and down completely randomly.
Pair Corralation between Templeton Global and Global Bond
Assuming the 90 days horizon Templeton Global Bond is expected to under-perform the Global Bond. In addition to that, Templeton Global is 1.87 times more volatile than Global Bond Fund. It trades about -0.21 of its total potential returns per unit of risk. Global Bond Fund is currently generating about -0.14 per unit of volatility. If you would invest 873.00 in Global Bond Fund on September 13, 2024 and sell it today you would lose (15.00) from holding Global Bond Fund or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Global Bond vs. Global Bond Fund
Performance |
| Timeline |
| Templeton Global Bond |
| Global Bond Fund |
Templeton Global and Global Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Global Bond
The main advantage of trading using opposite Templeton Global and Global Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, Global Bond 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 Global Bond will offset losses from the drop in Global Bond's long position.| Templeton Global vs. Franklin Mutual Beacon | Templeton Global vs. Templeton Developing Markets | Templeton Global vs. Franklin Mutual Global | Templeton Global vs. Franklin Mutual Global |
| Global Bond vs. Jhancock Global Equity | Global Bond vs. Ab Global Risk | Global Bond vs. Ab Global Bond | Global Bond vs. Scharf Global Opportunity |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |