Correlation Between Templeton Growth and Gamco International
Can any of the company-specific risk be diversified away by investing in both Templeton Growth and Gamco 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 Gamco 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 Gamco International Growth, you can compare the effects of market volatilities on Templeton Growth and Gamco 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 Gamco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Growth and Gamco International.
Diversification Opportunities for Templeton Growth and Gamco International
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Templeton and Gamco is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Growth Fund and Gamco International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco International 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 Gamco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco International has no effect on the direction of Templeton Growth i.e., Templeton Growth and Gamco International go up and down completely randomly.
Pair Corralation between Templeton Growth and Gamco International
Assuming the 90 days horizon Templeton Growth Fund is expected to generate 0.58 times more return on investment than Gamco International. However, Templeton Growth Fund is 1.73 times less risky than Gamco International. It trades about -0.26 of its potential returns per unit of risk. Gamco International Growth is currently generating about -0.33 per unit of risk. If you would invest 2,741 in Templeton Growth Fund on October 12, 2024 and sell it today you would lose (125.00) from holding Templeton Growth Fund or give up 4.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Growth Fund vs. Gamco International Growth
Performance |
| Timeline |
| Templeton Growth |
| Gamco International |
Templeton Growth and Gamco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Growth and Gamco International
The main advantage of trading using opposite Templeton Growth and Gamco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Growth position performs unexpectedly, Gamco 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 Gamco International will offset losses from the drop in Gamco International's long position.| Templeton Growth vs. Federated Global Allocation | Templeton Growth vs. Kinetics Global Fund | Templeton Growth vs. Investec Global Franchise | Templeton Growth vs. Barings Global Floating |
| Gamco International vs. Victory Incore Investment | Gamco International vs. Invesco Vertible Securities | Gamco International vs. Rationalpier 88 Convertible | Gamco International vs. Lord Abbett Vertible |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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