Correlation Between Templeton Emerging and Tekla World
Can any of the company-specific risk be diversified away by investing in both Templeton Emerging and Tekla World 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 Tekla World 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 Tekla World Healthcare, you can compare the effects of market volatilities on Templeton Emerging and Tekla World 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 Tekla World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Emerging and Tekla World.
Diversification Opportunities for Templeton Emerging and Tekla World
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Templeton and Tekla is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Emerging Markets and Tekla World Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla World Healthcare 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 Tekla World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla World Healthcare has no effect on the direction of Templeton Emerging i.e., Templeton Emerging and Tekla World go up and down completely randomly.
Pair Corralation between Templeton Emerging and Tekla World
Considering the 90-day investment horizon Templeton Emerging Markets is expected to generate 1.1 times more return on investment than Tekla World. However, Templeton Emerging is 1.1 times more volatile than Tekla World Healthcare. It trades about 0.07 of its potential returns per unit of risk. Tekla World Healthcare is currently generating about 0.02 per unit of risk. If you would invest 471.00 in Templeton Emerging Markets on August 28, 2024 and sell it today you would earn a total of 68.00 from holding Templeton Emerging Markets or generate 14.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.52% |
| Values | Daily Returns |
Templeton Emerging Markets vs. Tekla World Healthcare
Performance |
| Timeline |
| Templeton Emerging |
| Tekla World Healthcare |
Templeton Emerging and Tekla World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Emerging and Tekla World
The main advantage of trading using opposite Templeton Emerging and Tekla World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Emerging position performs unexpectedly, Tekla World 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 Tekla World will offset losses from the drop in Tekla World'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 |
| Tekla World vs. Tekla Healthcare Investors | Tekla World vs. Tekla Life Sciences | Tekla World vs. Flaherty and Crumrine | Tekla World vs. Cohen And Steers |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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