Correlation Between Templeton Growth and Ab International
Can any of the company-specific risk be diversified away by investing in both Templeton Growth and Ab International 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 Growth and Ab International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Growth Fund and Ab International Growth, you can compare the effects of market volatilities on Templeton Growth and Ab International 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 Growth with a short position of Ab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Growth and Ab International.
Diversification Opportunities for Templeton Growth and Ab International
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Templeton and AWPIX is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Growth Fund and Ab International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab International Growth and Templeton Growth 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 Growth Fund are associated (or correlated) with Ab International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab International Growth has no effect on the direction of Templeton Growth i.e., Templeton Growth and Ab International go up and down completely randomly.
Pair Corralation between Templeton Growth and Ab International
Assuming the 90 days horizon Templeton Growth Fund is expected to generate 0.93 times more return on investment than Ab International. However, Templeton Growth Fund is 1.07 times less risky than Ab International. It trades about 0.05 of its potential returns per unit of risk. Ab International Growth is currently generating about 0.03 per unit of risk. If you would invest 2,231 in Templeton Growth Fund on October 26, 2024 and sell it today you would earn a total of 460.00 from holding Templeton Growth Fund or generate 20.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Growth Fund vs. Ab International Growth
Performance |
| Timeline |
| Templeton Growth |
| Ab International Growth |
Templeton Growth and Ab International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Growth and Ab International
The main advantage of trading using opposite Templeton Growth and Ab International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Growth position performs unexpectedly, Ab International 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 Ab International will offset losses from the drop in Ab International's long position.| Templeton Growth vs. T Rowe Price | Templeton Growth vs. Guidemark Large Cap | Templeton Growth vs. Rational Strategic Allocation | Templeton Growth vs. Oppenheimer Global Allocation |
| Ab International vs. Wilmington Trust Retirement | Ab International vs. Dimensional Retirement Income | Ab International vs. Jp Morgan Smartretirement | Ab International vs. Moderate Balanced Allocation |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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