Correlation Between Templeton Developing and Sit Large
Can any of the company-specific risk be diversified away by investing in both Templeton Developing and Sit 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 Sit 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 Sit Large Cap, you can compare the effects of market volatilities on Templeton Developing and Sit 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 Sit Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Developing and Sit Large.
Diversification Opportunities for Templeton Developing and Sit Large
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Templeton and Sit is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Developing Markets and Sit Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit 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 Sit Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Large Cap has no effect on the direction of Templeton Developing i.e., Templeton Developing and Sit Large go up and down completely randomly.
Pair Corralation between Templeton Developing and Sit Large
Assuming the 90 days horizon Templeton Developing Markets is expected to under-perform the Sit Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Templeton Developing Markets is 1.01 times less risky than Sit Large. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Sit Large Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 7,776 in Sit Large Cap on September 12, 2024 and sell it today you would earn a total of 328.00 from holding Sit Large Cap or generate 4.22% 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. Sit Large Cap
Performance |
| Timeline |
| Templeton Developing |
| Sit Large Cap |
Templeton Developing and Sit Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Developing and Sit Large
The main advantage of trading using opposite Templeton Developing and Sit Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Developing position performs unexpectedly, Sit 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 Sit Large will offset losses from the drop in Sit 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 |
| Sit Large vs. Western Asset Municipal | Sit Large vs. Arrow Managed Futures | Sit Large vs. Ab Value Fund | Sit Large vs. Materials Portfolio Fidelity |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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