Correlation Between International Investors and Templeton Emerging
Can any of the company-specific risk be diversified away by investing in both International Investors and Templeton Emerging 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 Templeton Emerging 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 Templeton Emerging Markets, you can compare the effects of market volatilities on International Investors and Templeton Emerging 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 Templeton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Templeton Emerging.
Diversification Opportunities for International Investors and Templeton Emerging
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between International and Templeton is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Templeton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Emerging 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 Templeton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Emerging has no effect on the direction of International Investors i.e., International Investors and Templeton Emerging go up and down completely randomly.
Pair Corralation between International Investors and Templeton Emerging
Assuming the 90 days horizon International Investors Gold is expected to generate 2.64 times more return on investment than Templeton Emerging. However, International Investors is 2.64 times more volatile than Templeton Emerging Markets. It trades about 0.06 of its potential returns per unit of risk. Templeton Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 1,048 in International Investors Gold on September 3, 2024 and sell it today you would earn a total of 159.00 from holding International Investors Gold or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Investors Gold vs. Templeton Emerging Markets
Performance |
| Timeline |
| International Investors |
| Templeton Emerging |
International Investors and Templeton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Templeton Emerging
The main advantage of trading using opposite International Investors and Templeton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors position performs unexpectedly, Templeton Emerging 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 Emerging will offset losses from the drop in Templeton Emerging's long position.| International Investors vs. Dws Government Money | International Investors vs. John Hancock Money | International Investors vs. Lord Abbett Emerging | International Investors vs. Transamerica Funds |
| Templeton Emerging vs. Franklin Mutual Global | Templeton Emerging vs. Templeton Growth Fund | Templeton Emerging vs. Franklin Real Estate | Templeton Emerging vs. HUMANA INC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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