Correlation Between Nasdaq 100 and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 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 Nasdaq 100 and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Templeton Global Smaller, you can compare the effects of market volatilities on Nasdaq 100 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 Nasdaq 100 with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Templeton Global.
Diversification Opportunities for Nasdaq 100 and Templeton Global
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nasdaq and Templeton is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Templeton Global Smaller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Smaller and Nasdaq 100 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 Nasdaq 100 2x Strategy 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 Smaller has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Templeton Global go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Templeton Global
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 2.36 times more return on investment than Templeton Global. However, Nasdaq 100 is 2.36 times more volatile than Templeton Global Smaller. It trades about 0.15 of its potential returns per unit of risk. Templeton Global Smaller is currently generating about 0.05 per unit of risk. If you would invest 36,655 in Nasdaq 100 2x Strategy on September 12, 2024 and sell it today you would earn a total of 6,762 from holding Nasdaq 100 2x Strategy or generate 18.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Templeton Global Smaller
Performance |
| Timeline |
| Nasdaq 100 2x |
| Templeton Global Smaller |
Nasdaq 100 and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Templeton Global
The main advantage of trading using opposite Nasdaq 100 and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 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.| Nasdaq 100 vs. Lgm Risk Managed | Nasdaq 100 vs. Franklin High Income | Nasdaq 100 vs. Alliancebernstein Global High | Nasdaq 100 vs. Artisan High Income |
| Templeton Global vs. Franklin Mutual Global | Templeton Global vs. Jhancock Global Equity | Templeton Global vs. Scharf Global Opportunity | Templeton Global vs. Siit Global Managed |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |