Correlation Between Templeton Constrained and Six Circles
Can any of the company-specific risk be diversified away by investing in both Templeton Constrained and Six Circles 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 Constrained and Six Circles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TEMPLETON STRAINED BOND and Six Circles Managed, you can compare the effects of market volatilities on Templeton Constrained and Six Circles 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 Constrained with a short position of Six Circles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Constrained and Six Circles.
Diversification Opportunities for Templeton Constrained and Six Circles
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TEMPLETON and Six is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding TEMPLETON STRAINED BOND and Six Circles Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Circles Managed and Templeton Constrained 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 STRAINED BOND are associated (or correlated) with Six Circles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Circles Managed has no effect on the direction of Templeton Constrained i.e., Templeton Constrained and Six Circles go up and down completely randomly.
Pair Corralation between Templeton Constrained and Six Circles
Assuming the 90 days horizon TEMPLETON STRAINED BOND is expected to generate 0.07 times more return on investment than Six Circles. However, TEMPLETON STRAINED BOND is 15.17 times less risky than Six Circles. It trades about 0.87 of its potential returns per unit of risk. Six Circles Managed is currently generating about -0.26 per unit of risk. If you would invest 1,027 in TEMPLETON STRAINED BOND on August 28, 2024 and sell it today you would earn a total of 11.00 from holding TEMPLETON STRAINED BOND or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TEMPLETON STRAINED BOND vs. Six Circles Managed
Performance |
| Timeline |
| Templeton Strained Bond |
| Six Circles Managed |
Templeton Constrained and Six Circles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Constrained and Six Circles
The main advantage of trading using opposite Templeton Constrained and Six Circles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Constrained position performs unexpectedly, Six Circles 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 Six Circles will offset losses from the drop in Six Circles' long position.| Templeton Constrained vs. Calvert High Yield | Templeton Constrained vs. Artisan High Income | Templeton Constrained vs. California High Yield Municipal | Templeton Constrained vs. Metropolitan West High |
| Six Circles vs. Oil Gas Ultrasector | Six Circles vs. Dreyfus Natural Resources | Six Circles vs. World Energy Fund | Six Circles vs. Fidelity Advisor Energy |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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