Correlation Between Western Asset and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Adjustable and Templeton Global Balanced, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Templeton Global.
Diversification Opportunities for Western Asset and Templeton Global
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Western and Templeton is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Adjustable 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 Western Asset 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 Western Asset Adjustable 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 Western Asset i.e., Western Asset and Templeton Global go up and down completely randomly.
Pair Corralation between Western Asset and Templeton Global
Assuming the 90 days horizon Western Asset Adjustable is expected to generate 0.13 times more return on investment than Templeton Global. However, Western Asset Adjustable is 7.68 times less risky than Templeton Global. It trades about 0.22 of its potential returns per unit of risk. Templeton Global Balanced is currently generating about 0.03 per unit of risk. If you would invest 905.00 in Western Asset Adjustable on November 8, 2024 and sell it today you would earn a total of 9.00 from holding Western Asset Adjustable or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Adjustable vs. Templeton Global Balanced
Performance |
| Timeline |
| Western Asset Adjustable |
| Templeton Global Balanced |
Western Asset and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Templeton Global
The main advantage of trading using opposite Western Asset and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Bbh Partner Fund | Western Asset vs. Aqr Sustainable Long Short | Western Asset vs. Transamerica Funds | Western Asset vs. Siit Emerging Markets |
| Templeton Global vs. Blrc Sgy Mnp | Templeton Global vs. Aqr Sustainable Long Short | Templeton Global vs. Issachar Fund Class | Templeton Global vs. T Rowe Price |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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