Correlation Between Regional Bank and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Regional Bank 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 Regional Bank and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regional Bank Fund and Templeton Global Balanced, you can compare the effects of market volatilities on Regional Bank 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 Regional Bank with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Bank and Templeton Global.
Diversification Opportunities for Regional Bank and Templeton Global
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Regional and Templeton is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Regional Bank Fund and Templeton Global Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Balanced and Regional Bank 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 Regional Bank Fund 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 Balanced has no effect on the direction of Regional Bank i.e., Regional Bank and Templeton Global go up and down completely randomly.
Pair Corralation between Regional Bank and Templeton Global
Assuming the 90 days horizon Regional Bank Fund is expected to generate 2.82 times more return on investment than Templeton Global. However, Regional Bank is 2.82 times more volatile than Templeton Global Balanced. It trades about 0.02 of its potential returns per unit of risk. Templeton Global Balanced is currently generating about 0.04 per unit of risk. If you would invest 2,588 in Regional Bank Fund on November 8, 2024 and sell it today you would earn a total of 235.00 from holding Regional Bank Fund or generate 9.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regional Bank Fund vs. Templeton Global Balanced
Performance |
| Timeline |
| Regional Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Templeton Global Balanced |
Regional Bank and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Bank and Templeton Global
The main advantage of trading using opposite Regional Bank and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Bank 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.| Regional Bank vs. Siit High Yield | Regional Bank vs. Payden High Income | Regional Bank vs. T Rowe Price | Regional Bank vs. Tiaa Cref High Yield |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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