Correlation Between Templeton Developing and Inflation Protection
Can any of the company-specific risk be diversified away by investing in both Templeton Developing and Inflation Protection 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 Developing and Inflation Protection into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Developing Markets and Inflation Protection Fund, you can compare the effects of market volatilities on Templeton Developing and Inflation Protection 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 Developing with a short position of Inflation Protection. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Developing and Inflation Protection.
Diversification Opportunities for Templeton Developing and Inflation Protection
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Templeton and Inflation is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Developing Markets and Inflation Protection Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protection and Templeton Developing 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 Developing Markets are associated (or correlated) with Inflation Protection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protection has no effect on the direction of Templeton Developing i.e., Templeton Developing and Inflation Protection go up and down completely randomly.
Pair Corralation between Templeton Developing and Inflation Protection
Assuming the 90 days horizon Templeton Developing Markets is expected to generate 2.8 times more return on investment than Inflation Protection. However, Templeton Developing is 2.8 times more volatile than Inflation Protection Fund. It trades about 0.04 of its potential returns per unit of risk. Inflation Protection Fund is currently generating about 0.02 per unit of risk. If you would invest 1,630 in Templeton Developing Markets on September 3, 2024 and sell it today you would earn a total of 319.00 from holding Templeton Developing Markets or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Developing Markets vs. Inflation Protection Fund
Performance |
| Timeline |
| Templeton Developing |
| Inflation Protection |
Templeton Developing and Inflation Protection Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Developing and Inflation Protection
The main advantage of trading using opposite Templeton Developing and Inflation Protection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Developing position performs unexpectedly, Inflation Protection 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 Inflation Protection will offset losses from the drop in Inflation Protection's long position.| Templeton Developing vs. Franklin Mutual Global | Templeton Developing vs. Templeton Growth Fund | Templeton Developing vs. Franklin Real Estate | Templeton Developing vs. HUMANA INC |
| Inflation Protection vs. Jpmorgan Emerging Markets | Inflation Protection vs. Templeton Developing Markets | Inflation Protection vs. Rbc Emerging Markets | Inflation Protection vs. Locorr Market Trend |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |