Correlation Between Templeton Developing and Clearbridge Appreciation
Can any of the company-specific risk be diversified away by investing in both Templeton Developing and Clearbridge Appreciation 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 Appreciation 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 Appreciation Fund, you can compare the effects of market volatilities on Templeton Developing and Clearbridge Appreciation 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 Appreciation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Developing and Clearbridge Appreciation.
Diversification Opportunities for Templeton Developing and Clearbridge Appreciation
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Templeton and Clearbridge is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Developing Markets and Clearbridge Appreciation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Appreciation 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 Appreciation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Appreciation has no effect on the direction of Templeton Developing i.e., Templeton Developing and Clearbridge Appreciation go up and down completely randomly.
Pair Corralation between Templeton Developing and Clearbridge Appreciation
Assuming the 90 days horizon Templeton Developing Markets is expected to under-perform the Clearbridge Appreciation. In addition to that, Templeton Developing is 1.25 times more volatile than Clearbridge Appreciation Fund. It trades about -0.05 of its total potential returns per unit of risk. Clearbridge Appreciation Fund is currently generating about 0.17 per unit of volatility. If you would invest 3,823 in Clearbridge Appreciation Fund on September 12, 2024 and sell it today you would earn a total of 71.00 from holding Clearbridge Appreciation Fund or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Templeton Developing Markets vs. Clearbridge Appreciation Fund
Performance |
| Timeline |
| Templeton Developing |
| Clearbridge Appreciation |
Templeton Developing and Clearbridge Appreciation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Developing and Clearbridge Appreciation
The main advantage of trading using opposite Templeton Developing and Clearbridge Appreciation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Developing position performs unexpectedly, Clearbridge Appreciation 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 Appreciation will offset losses from the drop in Clearbridge Appreciation'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 Appreciation vs. Morningstar Aggressive Growth | Clearbridge Appreciation vs. Pace High Yield | Clearbridge Appreciation vs. Ppm High Yield | Clearbridge Appreciation vs. Lgm Risk Managed |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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