Correlation Between Templeton Emerging and Templeton Dragon
Can any of the company-specific risk be diversified away by investing in both Templeton Emerging and Templeton Dragon 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 Emerging and Templeton Dragon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Emerging Markets and Templeton Dragon Closed, you can compare the effects of market volatilities on Templeton Emerging and Templeton Dragon 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 Emerging with a short position of Templeton Dragon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Emerging and Templeton Dragon.
Diversification Opportunities for Templeton Emerging and Templeton Dragon
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Templeton and Templeton is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Emerging Markets and Templeton Dragon Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Dragon Closed and Templeton Emerging 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 Emerging Markets are associated (or correlated) with Templeton Dragon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Dragon Closed has no effect on the direction of Templeton Emerging i.e., Templeton Emerging and Templeton Dragon go up and down completely randomly.
Pair Corralation between Templeton Emerging and Templeton Dragon
Considering the 90-day investment horizon Templeton Emerging Markets is expected to generate 0.51 times more return on investment than Templeton Dragon. However, Templeton Emerging Markets is 1.94 times less risky than Templeton Dragon. It trades about 0.04 of its potential returns per unit of risk. Templeton Dragon Closed is currently generating about 0.02 per unit of risk. If you would invest 512.00 in Templeton Emerging Markets on August 28, 2024 and sell it today you would earn a total of 27.00 from holding Templeton Emerging Markets or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Emerging Markets vs. Templeton Dragon Closed
Performance |
| Timeline |
| Templeton Emerging |
| Templeton Dragon Closed |
Templeton Emerging and Templeton Dragon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Emerging and Templeton Dragon
The main advantage of trading using opposite Templeton Emerging and Templeton Dragon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Emerging position performs unexpectedly, Templeton Dragon 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 Dragon will offset losses from the drop in Templeton Dragon's long position.| Templeton Emerging vs. Franklin Templeton Limited | Templeton Emerging vs. Western Asset Global | Templeton Emerging vs. MFS Multimarket Income | Templeton Emerging vs. Aberdeen Asia Pacific If |
| Templeton Dragon vs. Nuveen Municipalome | Templeton Dragon vs. Western Asset Investment | Templeton Dragon vs. Templeton Emerging Markets | Templeton Dragon vs. Tekla Life Sciences |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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