Correlation Between Nexpoint Real and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both Nexpoint Real and Templeton Growth 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 Nexpoint Real and Templeton Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexpoint Real Estate and Templeton Growth Fund, you can compare the effects of market volatilities on Nexpoint Real and Templeton Growth 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 Nexpoint Real with a short position of Templeton Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexpoint Real and Templeton Growth.
Diversification Opportunities for Nexpoint Real and Templeton Growth
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between NexPoint and Templeton is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nexpoint Real Estate and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Growth and Nexpoint Real 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 Nexpoint Real Estate are associated (or correlated) with Templeton Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Growth has no effect on the direction of Nexpoint Real i.e., Nexpoint Real and Templeton Growth go up and down completely randomly.
Pair Corralation between Nexpoint Real and Templeton Growth
Assuming the 90 days horizon Nexpoint Real Estate is expected to under-perform the Templeton Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nexpoint Real Estate is 2.35 times less risky than Templeton Growth. The mutual fund trades about -0.26 of its potential returns per unit of risk. The Templeton Growth Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,656 in Templeton Growth Fund on November 4, 2024 and sell it today you would earn a total of 73.00 from holding Templeton Growth Fund or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexpoint Real Estate vs. Templeton Growth Fund
Performance |
| Timeline |
| Nexpoint Real Estate |
| Templeton Growth |
Nexpoint Real and Templeton Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexpoint Real and Templeton Growth
The main advantage of trading using opposite Nexpoint Real and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexpoint Real position performs unexpectedly, Templeton Growth 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 Growth will offset losses from the drop in Templeton Growth's long position.| Nexpoint Real vs. Bbh Intermediate Municipal | Nexpoint Real vs. Ambrus Core Bond | Nexpoint Real vs. Chartwell Short Duration | Nexpoint Real vs. Massmutual Premier High |
| Templeton Growth vs. Tiaa Cref Inflation Link | Templeton Growth vs. Cref Inflation Linked Bond | Templeton Growth vs. Asg Managed Futures | Templeton Growth vs. Tiaa Cref Inflation Linked 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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