Correlation Between Mutual Of and Templeton Emerging
Can any of the company-specific risk be diversified away by investing in both Mutual Of 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 Mutual Of and Templeton Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mutual Of America and Templeton Emerging Markets, you can compare the effects of market volatilities on Mutual Of 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 Mutual Of with a short position of Templeton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mutual Of and Templeton Emerging.
Diversification Opportunities for Mutual Of and Templeton Emerging
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mutual and Templeton is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mutual Of America and Templeton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Emerging and Mutual Of 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 Mutual Of America 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 Mutual Of i.e., Mutual Of and Templeton Emerging go up and down completely randomly.
Pair Corralation between Mutual Of and Templeton Emerging
Assuming the 90 days horizon Mutual Of America is expected to under-perform the Templeton Emerging. In addition to that, Mutual Of is 1.84 times more volatile than Templeton Emerging Markets. It trades about -0.04 of its total potential returns per unit of risk. Templeton Emerging Markets is currently generating about 0.23 per unit of volatility. If you would invest 1,366 in Templeton Emerging Markets on September 13, 2024 and sell it today you would earn a total of 27.00 from holding Templeton Emerging Markets or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mutual Of America vs. Templeton Emerging Markets
Performance |
| Timeline |
| Mutual Of America |
| Templeton Emerging |
Mutual Of and Templeton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mutual Of and Templeton Emerging
The main advantage of trading using opposite Mutual Of and Templeton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mutual Of 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.| Mutual Of vs. Franklin High Yield | Mutual Of vs. Virtus High Yield | Mutual Of vs. Neuberger Berman Income | Mutual Of vs. Msift High Yield |
| Templeton Emerging vs. Franklin Mutual Beacon | Templeton Emerging vs. Templeton Developing Markets | Templeton Emerging vs. Franklin Mutual Global | Templeton Emerging vs. Franklin Mutual Global |
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 Stocks Directory module to find actively traded stocks across global markets.
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