Correlation Between NYSE Composite and Templeton China
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Templeton China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Templeton China World, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Templeton China. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Templeton China.
Diversification Opportunities for NYSE Composite and Templeton China
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Templeton is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Templeton China go up and down completely randomly.
Pair Corralation between NYSE Composite and Templeton China
If you would invest 1,925,354 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 101,850 from holding NYSE Composite or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
NYSE Composite vs. Templeton China World
Performance |
| Timeline |
NYSE Composite and Templeton China Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Templeton China World
Pair trading matchups for Templeton China
Pair Trading with NYSE Composite and Templeton China
The main advantage of trading using opposite NYSE Composite and Templeton China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Templeton China vs. Dreyfus Institutional Reserves | Templeton China vs. Cref Money Market | Templeton China vs. Lord Abbett Govt | Templeton China vs. Franklin Government Money |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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