Correlation Between Templeton Foreign and Pace High
Can any of the company-specific risk be diversified away by investing in both Templeton Foreign and Pace High 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 Pace High 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 Pace High Yield, you can compare the effects of market volatilities on Templeton Foreign and Pace High 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 Pace High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Foreign and Pace High.
Diversification Opportunities for Templeton Foreign and Pace High
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and Pace is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Foreign Fund and Pace High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace High Yield 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 Pace High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace High Yield has no effect on the direction of Templeton Foreign i.e., Templeton Foreign and Pace High go up and down completely randomly.
Pair Corralation between Templeton Foreign and Pace High
Assuming the 90 days horizon Templeton Foreign Fund is expected to generate 4.16 times more return on investment than Pace High. However, Templeton Foreign is 4.16 times more volatile than Pace High Yield. It trades about 0.04 of its potential returns per unit of risk. Pace High Yield is currently generating about 0.16 per unit of risk. If you would invest 680.00 in Templeton Foreign Fund on September 4, 2024 and sell it today you would earn a total of 133.00 from holding Templeton Foreign Fund or generate 19.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Templeton Foreign Fund vs. Pace High Yield
Performance |
| Timeline |
| Templeton Foreign |
| Pace High Yield |
Templeton Foreign and Pace High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Foreign and Pace High
The main advantage of trading using opposite Templeton Foreign and Pace High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Foreign position performs unexpectedly, Pace High 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 Pace High will offset losses from the drop in Pace High's long position.| Templeton Foreign vs. Aqr Managed Futures | Templeton Foreign vs. Guidepath Managed Futures | Templeton Foreign vs. Arrow Managed Futures | Templeton Foreign vs. Ab Bond Inflation |
| Pace High vs. Pace International Equity | Pace High vs. Pace International Equity | Pace High vs. Ubs Allocation Fund | Pace High vs. Ubs Allocation Fund |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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