Correlation Between High Yield and Templeton Global
Can any of the company-specific risk be diversified away by investing in both High Yield and Templeton Global 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 High Yield and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Fund and Templeton Global Balanced, you can compare the effects of market volatilities on High Yield and Templeton Global 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 High Yield with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Templeton Global.
Diversification Opportunities for High Yield and Templeton Global
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between High and TEMPLETON is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Fund and Templeton Global Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Balanced and High Yield 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 High Yield Fund are associated (or correlated) with Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Balanced has no effect on the direction of High Yield i.e., High Yield and Templeton Global go up and down completely randomly.
Pair Corralation between High Yield and Templeton Global
Assuming the 90 days horizon High Yield Fund is expected to generate 0.4 times more return on investment than Templeton Global. However, High Yield Fund is 2.52 times less risky than Templeton Global. It trades about 0.12 of its potential returns per unit of risk. Templeton Global Balanced is currently generating about 0.05 per unit of risk. If you would invest 712.00 in High Yield Fund on August 29, 2024 and sell it today you would earn a total of 95.00 from holding High Yield Fund or generate 13.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Fund vs. Templeton Global Balanced
Performance |
| Timeline |
| High Yield Fund |
| Templeton Global Balanced |
High Yield and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and Templeton Global
The main advantage of trading using opposite High Yield and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, Templeton Global 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 Global will offset losses from the drop in Templeton Global's long position.| High Yield vs. Ishares Municipal Bond | High Yield vs. Dws Government Money | High Yield vs. Multisector Bond Sma | High Yield vs. T Rowe Price |
| Templeton Global vs. Franklin Mutual Beacon | Templeton Global vs. Templeton Developing Markets | Templeton Global vs. Franklin Mutual Global | Templeton Global 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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