Correlation Between Templeton Growth and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both Templeton Growth and Templeton Growth 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 Growth 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 Growth Fund, you can compare the effects of market volatilities on Templeton Growth and Templeton Growth 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 Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Growth and Templeton Growth.
Diversification Opportunities for Templeton Growth and Templeton Growth
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Templeton and Templeton is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Growth Fund and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton 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 Templeton Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Growth has no effect on the direction of Templeton Growth i.e., Templeton Growth and Templeton Growth go up and down completely randomly.
Pair Corralation between Templeton Growth and Templeton Growth
Assuming the 90 days horizon Templeton Growth is expected to generate 1.01 times less return on investment than Templeton Growth. In addition to that, Templeton Growth is 1.01 times more volatile than Templeton Growth Fund. It trades about 0.2 of its total potential returns per unit of risk. Templeton Growth Fund is currently generating about 0.21 per unit of volatility. If you would invest 2,731 in Templeton Growth Fund on September 3, 2024 and sell it today you would earn a total of 72.00 from holding Templeton Growth Fund or generate 2.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Growth Fund vs. Templeton Growth Fund
Performance |
| Timeline |
| Templeton Growth |
| Templeton Growth |
Templeton Growth and Templeton Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Growth and Templeton Growth
The main advantage of trading using opposite Templeton Growth and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Growth position performs unexpectedly, Templeton Growth 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 Growth will offset losses from the drop in Templeton Growth's long position.The idea behind Templeton Growth Fund and Templeton Growth Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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