Correlation Between NYSE Composite and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Templeton Growth 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 Growth Fund, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Templeton Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Templeton Growth.
Diversification Opportunities for NYSE Composite and Templeton Growth
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Templeton is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Growth 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 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 NYSE Composite i.e., NYSE Composite and Templeton Growth go up and down completely randomly.
Pair Corralation between NYSE Composite and Templeton Growth
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.9 times more return on investment than Templeton Growth. However, NYSE Composite is 1.11 times less risky than Templeton Growth. It trades about 0.13 of its potential returns per unit of risk. Templeton Growth Fund is currently generating about 0.07 per unit of risk. If you would invest 1,898,790 in NYSE Composite on September 12, 2024 and sell it today you would earn a total of 89,400 from holding NYSE Composite or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
NYSE Composite vs. Templeton Growth Fund
Performance |
| Timeline |
NYSE Composite and Templeton Growth Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Templeton Growth Fund
Pair trading matchups for Templeton Growth
Pair Trading with NYSE Composite and Templeton Growth
The main advantage of trading using opposite NYSE Composite and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Teleflex Incorporated | NYSE Composite vs. Victorias Secret Co | NYSE Composite vs. Under Armour C | NYSE Composite vs. Steven Madden |
| Templeton Growth vs. Transamerica Financial Life | Templeton Growth vs. Goldman Sachs Financial | Templeton Growth vs. Davis Financial Fund | Templeton Growth vs. Royce Global Financial |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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