Correlation Between International Investors and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both International Investors and Franklin Templeton 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 International Investors and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and Franklin Templeton Smacs, you can compare the effects of market volatilities on International Investors and Franklin Templeton 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 International Investors with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Franklin Templeton.
Diversification Opportunities for International Investors and Franklin Templeton
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and Franklin is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Franklin Templeton Smacs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton Smacs and International Investors 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 International Investors Gold are associated (or correlated) with Franklin Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton Smacs has no effect on the direction of International Investors i.e., International Investors and Franklin Templeton go up and down completely randomly.
Pair Corralation between International Investors and Franklin Templeton
Assuming the 90 days horizon International Investors Gold is expected to generate 1.3 times more return on investment than Franklin Templeton. However, International Investors is 1.3 times more volatile than Franklin Templeton Smacs. It trades about 0.2 of its potential returns per unit of risk. Franklin Templeton Smacs is currently generating about 0.05 per unit of risk. If you would invest 1,083 in International Investors Gold on December 2, 2024 and sell it today you would earn a total of 135.00 from holding International Investors Gold or generate 12.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Investors Gold vs. Franklin Templeton Smacs
Performance |
| Timeline |
| International Investors |
| Franklin Templeton Smacs |
International Investors and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Franklin Templeton
The main advantage of trading using opposite International Investors and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors position performs unexpectedly, Franklin Templeton 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 Franklin Templeton will offset losses from the drop in Franklin Templeton's long position.| International Investors vs. Ab Global Real | International Investors vs. T Rowe Price | International Investors vs. Barings Global Floating | International Investors vs. T Rowe Price |
| Franklin Templeton vs. John Hancock Government | Franklin Templeton vs. Lord Abbett Intermediate | Franklin Templeton vs. Us Government Securities | Franklin Templeton vs. Old Westbury Municipal |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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