Correlation Between Templeton Growth and Templeton Foreign
Can any of the company-specific risk be diversified away by investing in both Templeton Growth and Templeton Foreign 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 Templeton Foreign 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 Templeton Foreign Fund, you can compare the effects of market volatilities on Templeton Growth and Templeton Foreign 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 Templeton Foreign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Growth and Templeton Foreign.
Diversification Opportunities for Templeton Growth and Templeton Foreign
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Templeton and Templeton is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Growth Fund and Templeton Foreign Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Foreign 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 Templeton Foreign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Foreign has no effect on the direction of Templeton Growth i.e., Templeton Growth and Templeton Foreign go up and down completely randomly.
Pair Corralation between Templeton Growth and Templeton Foreign
Assuming the 90 days horizon Templeton Growth Fund is expected to generate 0.65 times more return on investment than Templeton Foreign. However, Templeton Growth Fund is 1.54 times less risky than Templeton Foreign. It trades about 0.02 of its potential returns per unit of risk. Templeton Foreign Fund is currently generating about -0.13 per unit of risk. If you would invest 2,737 in Templeton Growth Fund on August 29, 2024 and sell it today you would earn a total of 8.00 from holding Templeton Growth Fund or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Templeton Growth Fund vs. Templeton Foreign Fund
Performance |
| Timeline |
| Templeton Growth |
| Templeton Foreign |
Templeton Growth and Templeton Foreign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Growth and Templeton Foreign
The main advantage of trading using opposite Templeton Growth and Templeton Foreign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Growth position performs unexpectedly, Templeton Foreign 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 Templeton Foreign will offset losses from the drop in Templeton Foreign'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 |
| Templeton Foreign vs. Victory High Income | Templeton Foreign vs. Ppm High Yield | Templeton Foreign vs. Morningstar Aggressive Growth | Templeton Foreign vs. Artisan High Income |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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