Correlation Between Gmo Global and Templeton China
Can any of the company-specific risk be diversified away by investing in both Gmo Global and Templeton China 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 Gmo Global and Templeton China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Global Equity and Templeton China World, you can compare the effects of market volatilities on Gmo Global and Templeton China 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 Gmo Global with a short position of Templeton China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Global and Templeton China.
Diversification Opportunities for Gmo Global and Templeton China
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gmo and Templeton is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Global Equity and Templeton China World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton China World and Gmo 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 Gmo Global Equity are associated (or correlated) with Templeton China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton China World has no effect on the direction of Gmo Global i.e., Gmo Global and Templeton China go up and down completely randomly.
Pair Corralation between Gmo Global and Templeton China
If you would invest 2,977 in Gmo Global Equity on September 5, 2024 and sell it today you would earn a total of 56.00 from holding Gmo Global Equity or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Gmo Global Equity vs. Templeton China World
Performance |
| Timeline |
| Gmo Global Equity |
| Templeton China World |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Gmo Global and Templeton China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Global and Templeton China
The main advantage of trading using opposite Gmo Global and Templeton China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Global position performs unexpectedly, Templeton China 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 China will offset losses from the drop in Templeton China's long position.| Gmo Global vs. Fidelity Capital Income | Gmo Global vs. Siit High Yield | Gmo Global vs. Goldman Sachs High | Gmo Global vs. Alpine High Yield |
| Templeton China vs. Sarofim Equity | Templeton China vs. Rbc Global Equity | Templeton China vs. Calamos Global Equity | Templeton China vs. Gmo Global Equity |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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