Correlation Between Moderately Aggressive and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Moderately Aggressive 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 Moderately Aggressive and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderately Aggressive Balanced and Templeton Global Smaller, you can compare the effects of market volatilities on Moderately Aggressive 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 Moderately Aggressive with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderately Aggressive and Templeton Global.
Diversification Opportunities for Moderately Aggressive and Templeton Global
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Moderately and Templeton is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Moderately Aggressive Balanced 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 Moderately Aggressive 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 Moderately Aggressive Balanced 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 Moderately Aggressive i.e., Moderately Aggressive and Templeton Global go up and down completely randomly.
Pair Corralation between Moderately Aggressive and Templeton Global
Assuming the 90 days horizon Moderately Aggressive Balanced is expected to generate 0.65 times more return on investment than Templeton Global. However, Moderately Aggressive Balanced is 1.53 times less risky than Templeton Global. It trades about -0.31 of its potential returns per unit of risk. Templeton Global Smaller is currently generating about -0.31 per unit of risk. If you would invest 1,213 in Moderately Aggressive Balanced on December 1, 2024 and sell it today you would lose (39.00) from holding Moderately Aggressive Balanced or give up 3.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moderately Aggressive Balanced vs. Templeton Global Smaller
Performance |
| Timeline |
| Moderately Aggressive |
| Templeton Global Smaller |
Moderately Aggressive and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderately Aggressive and Templeton Global
The main advantage of trading using opposite Moderately Aggressive and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderately Aggressive 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.| Moderately Aggressive vs. Buffalo High Yield | Moderately Aggressive vs. Mainstay High Yield | Moderately Aggressive vs. Voya High Yield | Moderately Aggressive vs. Dunham High Yield |
| Templeton Global vs. Ab Bond Inflation | Templeton Global vs. Ab Bond Inflation | Templeton Global vs. Aqr Managed Futures | Templeton Global vs. Credit Suisse Multialternative |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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