Correlation Between Templeton Growth and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Templeton Growth and Templeton Global 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 Global 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 Global Balanced, you can compare the effects of market volatilities on Templeton Growth and Templeton Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Growth and Templeton Global.
Diversification Opportunities for Templeton Growth and Templeton Global
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Templeton and Templeton is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Growth Fund and Templeton Global Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Balanced 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Balanced has no effect on the direction of Templeton Growth i.e., Templeton Growth and Templeton Global go up and down completely randomly.
Pair Corralation between Templeton Growth and Templeton Global
Assuming the 90 days horizon Templeton Growth is expected to generate 1.15 times less return on investment than Templeton Global. In addition to that, Templeton Growth is 1.21 times more volatile than Templeton Global Balanced. It trades about 0.27 of its total potential returns per unit of risk. Templeton Global Balanced is currently generating about 0.38 per unit of volatility. If you would invest 238.00 in Templeton Global Balanced on October 31, 2024 and sell it today you would earn a total of 10.00 from holding Templeton Global Balanced or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Growth Fund vs. Templeton Global Balanced
Performance |
| Timeline |
| Templeton Growth |
| Templeton Global Balanced |
Templeton Growth and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Growth and Templeton Global
The main advantage of trading using opposite Templeton Growth and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Growth position performs unexpectedly, Templeton Global 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 Global will offset losses from the drop in Templeton Global's long position.| Templeton Growth vs. Franklin Mutual Beacon | Templeton Growth vs. Templeton Developing Markets | Templeton Growth vs. Franklin Mutual Global | Templeton Growth vs. Franklin Mutual Global |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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