Correlation Between Templeton Dragon and Mainstay Definedterm
Can any of the company-specific risk be diversified away by investing in both Templeton Dragon and Mainstay Definedterm 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 Templeton Dragon and Mainstay Definedterm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Dragon Closed and Mainstay Definedterm Muncipal, you can compare the effects of market volatilities on Templeton Dragon and Mainstay Definedterm 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 Templeton Dragon with a short position of Mainstay Definedterm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Dragon and Mainstay Definedterm.
Diversification Opportunities for Templeton Dragon and Mainstay Definedterm
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Templeton and Mainstay is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Dragon Closed and Mainstay Definedterm Muncipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Definedterm and Templeton Dragon 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 Templeton Dragon Closed are associated (or correlated) with Mainstay Definedterm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Definedterm has no effect on the direction of Templeton Dragon i.e., Templeton Dragon and Mainstay Definedterm go up and down completely randomly.
Pair Corralation between Templeton Dragon and Mainstay Definedterm
Considering the 90-day investment horizon Templeton Dragon Closed is expected to generate 2.91 times more return on investment than Mainstay Definedterm. However, Templeton Dragon is 2.91 times more volatile than Mainstay Definedterm Muncipal. It trades about 0.05 of its potential returns per unit of risk. Mainstay Definedterm Muncipal is currently generating about 0.01 per unit of risk. If you would invest 740.00 in Templeton Dragon Closed on November 9, 2024 and sell it today you would earn a total of 137.00 from holding Templeton Dragon Closed or generate 18.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Dragon Closed vs. Mainstay Definedterm Muncipal
Performance |
| Timeline |
| Templeton Dragon Closed |
| Mainstay Definedterm |
Templeton Dragon and Mainstay Definedterm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Dragon and Mainstay Definedterm
The main advantage of trading using opposite Templeton Dragon and Mainstay Definedterm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Dragon position performs unexpectedly, Mainstay Definedterm 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 Mainstay Definedterm will offset losses from the drop in Mainstay Definedterm's long position.| Templeton Dragon vs. Nuveen Municipalome | Templeton Dragon vs. Western Asset Investment | Templeton Dragon vs. Templeton Emerging Markets | Templeton Dragon vs. Tekla Life Sciences |
| Mainstay Definedterm vs. Blackrock Muniholdings Closed | Mainstay Definedterm vs. DTF Tax Free | Mainstay Definedterm vs. John Hancock Income | Mainstay Definedterm vs. MFS Investment Grade |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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