Correlation Between Templeton Foreign and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Templeton Foreign and Oakmark International 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 Foreign and Oakmark International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Foreign Fund and Oakmark International Fund, you can compare the effects of market volatilities on Templeton Foreign and Oakmark International 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 Foreign with a short position of Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Foreign and Oakmark International.
Diversification Opportunities for Templeton Foreign and Oakmark International
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Templeton and Oakmark is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Foreign Fund and Oakmark International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Templeton Foreign 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 Foreign Fund are associated (or correlated) with Oakmark International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark International has no effect on the direction of Templeton Foreign i.e., Templeton Foreign and Oakmark International go up and down completely randomly.
Pair Corralation between Templeton Foreign and Oakmark International
Assuming the 90 days horizon Templeton Foreign is expected to generate 2.6 times less return on investment than Oakmark International. But when comparing it to its historical volatility, Templeton Foreign Fund is 1.16 times less risky than Oakmark International. It trades about 0.14 of its potential returns per unit of risk. Oakmark International Fund is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,531 in Oakmark International Fund on September 13, 2024 and sell it today you would earn a total of 126.00 from holding Oakmark International Fund or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Foreign Fund vs. Oakmark International Fund
Performance |
| Timeline |
| Templeton Foreign |
| Oakmark International |
Templeton Foreign and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Foreign and Oakmark International
The main advantage of trading using opposite Templeton Foreign and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Foreign position performs unexpectedly, Oakmark International 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 Oakmark International will offset losses from the drop in Oakmark International's long position.| Templeton Foreign vs. Us High Relative | Templeton Foreign vs. Artisan High Income | Templeton Foreign vs. Western Asset High | Templeton Foreign vs. Siit High Yield |
| Oakmark International vs. Oakmark International Fund | Oakmark International vs. Oakmark Fund Advisor | Oakmark International vs. Oakmark Global Select | Oakmark International vs. Oakmark Bond |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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