Correlation Between Templeton Growth and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both Templeton Growth and Guinness Atkinson 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 Guinness Atkinson 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 Guinness Atkinson Alternative, you can compare the effects of market volatilities on Templeton Growth and Guinness Atkinson 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 Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Growth and Guinness Atkinson.
Diversification Opportunities for Templeton Growth and Guinness Atkinson
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Templeton and Guinness is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Growth Fund and Guinness Atkinson Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson 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 Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson has no effect on the direction of Templeton Growth i.e., Templeton Growth and Guinness Atkinson go up and down completely randomly.
Pair Corralation between Templeton Growth and Guinness Atkinson
Assuming the 90 days horizon Templeton Growth Fund is expected to generate 0.6 times more return on investment than Guinness Atkinson. However, Templeton Growth Fund is 1.66 times less risky than Guinness Atkinson. It trades about 0.07 of its potential returns per unit of risk. Guinness Atkinson Alternative is currently generating about -0.01 per unit of risk. If you would invest 2,127 in Templeton Growth Fund on August 29, 2024 and sell it today you would earn a total of 614.00 from holding Templeton Growth Fund or generate 28.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Growth Fund vs. Guinness Atkinson Alternative
Performance |
| Timeline |
| Templeton Growth |
| Guinness Atkinson |
Templeton Growth and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Growth and Guinness Atkinson
The main advantage of trading using opposite Templeton Growth and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Growth position performs unexpectedly, Guinness Atkinson 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 Guinness Atkinson will offset losses from the drop in Guinness Atkinson's long position.| Templeton Growth vs. Guinness Atkinson Alternative | Templeton Growth vs. Goldman Sachs Mlp | Templeton Growth vs. Alpsalerian Energy Infrastructure | Templeton Growth vs. Clearbridge Energy Mlp |
| Guinness Atkinson vs. Firsthand Alternative Energy | Guinness Atkinson vs. Portfolio 21 Global | Guinness Atkinson vs. HUMANA INC | Guinness Atkinson vs. Aquagold International |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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