Correlation Between Templeton Global and Western Asset
Can any of the company-specific risk be diversified away by investing in both Templeton Global and Western Asset 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 Global and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Global Bond and Western Asset High, you can compare the effects of market volatilities on Templeton Global and Western Asset 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 Global with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Western Asset.
Diversification Opportunities for Templeton Global and Western Asset
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and Western is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Bond and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and Templeton Global 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 Global Bond are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of Templeton Global i.e., Templeton Global and Western Asset go up and down completely randomly.
Pair Corralation between Templeton Global and Western Asset
Assuming the 90 days horizon Templeton Global Bond is expected to under-perform the Western Asset. In addition to that, Templeton Global is 3.67 times more volatile than Western Asset High. It trades about -0.38 of its total potential returns per unit of risk. Western Asset High is currently generating about -0.02 per unit of volatility. If you would invest 703.00 in Western Asset High on August 30, 2024 and sell it today you would lose (1.00) from holding Western Asset High or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Templeton Global Bond vs. Western Asset High
Performance |
| Timeline |
| Templeton Global Bond |
| Western Asset High |
Templeton Global and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Western Asset
The main advantage of trading using opposite Templeton Global and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Templeton Global vs. Gamco Global Telecommunications | Templeton Global vs. T Rowe Price | Templeton Global vs. Nebraska Municipal Fund | Templeton Global vs. Franklin High Yield |
| Western Asset vs. Franklin Mutual Beacon | Western Asset vs. Templeton Developing Markets | Western Asset vs. Franklin Mutual Global | Western Asset 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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