Correlation Between Global Bond and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Global Bond 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 Global Bond and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Bond Fund and Templeton Global Bond, you can compare the effects of market volatilities on Global Bond 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 Global Bond with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Bond and Templeton Global.
Diversification Opportunities for Global Bond and Templeton Global
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Templeton is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Global Bond Fund and Templeton Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Bond and Global Bond 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 Global Bond 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 Bond has no effect on the direction of Global Bond i.e., Global Bond and Templeton Global go up and down completely randomly.
Pair Corralation between Global Bond and Templeton Global
Assuming the 90 days horizon Global Bond Fund is expected to generate 0.59 times more return on investment than Templeton Global. However, Global Bond Fund is 1.68 times less risky than Templeton Global. It trades about 0.07 of its potential returns per unit of risk. Templeton Global Bond is currently generating about -0.01 per unit of risk. If you would invest 803.00 in Global Bond Fund on September 12, 2024 and sell it today you would earn a total of 59.00 from holding Global Bond Fund or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Bond Fund vs. Templeton Global Bond
Performance |
| Timeline |
| Global Bond Fund |
| Templeton Global Bond |
Global Bond and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Bond and Templeton Global
The main advantage of trading using opposite Global Bond and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Bond 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.| Global Bond vs. Templeton Global Bond | Global Bond vs. Templeton Global Bond | Global Bond vs. Capital World Bond | Global Bond vs. Capital World Bond |
| Templeton Global vs. Templeton Global Bond | Templeton Global vs. Capital World Bond | Templeton Global vs. Capital World Bond | Templeton Global vs. Capital World Bond |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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