Correlation Between Templeton Developing and Clearbridge Large
Can any of the company-specific risk be diversified away by investing in both Templeton Developing and Clearbridge Large 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 Clearbridge Large 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 Clearbridge Large Cap, you can compare the effects of market volatilities on Templeton Developing and Clearbridge Large 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 Clearbridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Developing and Clearbridge Large.
Diversification Opportunities for Templeton Developing and Clearbridge Large
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and Clearbridge is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Developing Markets and Clearbridge Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Large Cap 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 Clearbridge Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Large Cap has no effect on the direction of Templeton Developing i.e., Templeton Developing and Clearbridge Large go up and down completely randomly.
Pair Corralation between Templeton Developing and Clearbridge Large
Assuming the 90 days horizon Templeton Developing is expected to generate 2.18 times less return on investment than Clearbridge Large. But when comparing it to its historical volatility, Templeton Developing Markets is 1.08 times less risky than Clearbridge Large. It trades about 0.05 of its potential returns per unit of risk. Clearbridge Large Cap is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,961 in Clearbridge Large Cap on September 14, 2024 and sell it today you would earn a total of 2,513 from holding Clearbridge Large Cap or generate 63.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Developing Markets vs. Clearbridge Large Cap
Performance |
| Timeline |
| Templeton Developing |
| Clearbridge Large Cap |
Templeton Developing and Clearbridge Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Developing and Clearbridge Large
The main advantage of trading using opposite Templeton Developing and Clearbridge Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Developing position performs unexpectedly, Clearbridge Large 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 Clearbridge Large will offset losses from the drop in Clearbridge Large's long position.| Templeton Developing vs. Templeton Foreign Fund | Templeton Developing vs. Franklin Mutual Global | Templeton Developing vs. Templeton Growth Fund | Templeton Developing vs. Franklin Small Mid Cap |
| Clearbridge Large vs. Franklin Mutual Beacon | Clearbridge Large vs. Templeton Developing Markets | Clearbridge Large vs. Franklin Mutual Global | Clearbridge Large vs. Franklin Mutual Global |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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