Correlation Between Templeton Foreign and Clearbridge Mid
Can any of the company-specific risk be diversified away by investing in both Templeton Foreign and Clearbridge Mid 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 Foreign and Clearbridge Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Foreign Fund and Clearbridge Mid Cap, you can compare the effects of market volatilities on Templeton Foreign and Clearbridge Mid 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 Foreign with a short position of Clearbridge Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Foreign and Clearbridge Mid.
Diversification Opportunities for Templeton Foreign and Clearbridge Mid
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and CLEARBRIDGE is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Foreign Fund and Clearbridge Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Mid Cap and Templeton Foreign 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 Foreign Fund are associated (or correlated) with Clearbridge Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Mid Cap has no effect on the direction of Templeton Foreign i.e., Templeton Foreign and Clearbridge Mid go up and down completely randomly.
Pair Corralation between Templeton Foreign and Clearbridge Mid
Assuming the 90 days horizon Templeton Foreign Fund is expected to under-perform the Clearbridge Mid. In addition to that, Templeton Foreign is 1.06 times more volatile than Clearbridge Mid Cap. It trades about -0.04 of its total potential returns per unit of risk. Clearbridge Mid Cap is currently generating about 0.45 per unit of volatility. If you would invest 3,531 in Clearbridge Mid Cap on September 1, 2024 and sell it today you would earn a total of 367.00 from holding Clearbridge Mid Cap or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Templeton Foreign Fund vs. Clearbridge Mid Cap
Performance |
| Timeline |
| Templeton Foreign |
| Clearbridge Mid Cap |
Templeton Foreign and Clearbridge Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Foreign and Clearbridge Mid
The main advantage of trading using opposite Templeton Foreign and Clearbridge Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Foreign position performs unexpectedly, Clearbridge Mid 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 Mid will offset losses from the drop in Clearbridge Mid's long position.| Templeton Foreign vs. Deutsche Health And | Templeton Foreign vs. The Gabelli Healthcare | Templeton Foreign vs. Lord Abbett Health | Templeton Foreign vs. Eventide Healthcare Life |
| Clearbridge Mid vs. Franklin Mutual Beacon | Clearbridge Mid vs. Templeton Developing Markets | Clearbridge Mid vs. Franklin Mutual Global | Clearbridge Mid 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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