Correlation Between Templeton Foreign and Clearbridge Appreciation
Can any of the company-specific risk be diversified away by investing in both Templeton Foreign and Clearbridge Appreciation 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 Clearbridge Appreciation 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 Clearbridge Appreciation Fund, you can compare the effects of market volatilities on Templeton Foreign and Clearbridge Appreciation 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 Clearbridge Appreciation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Foreign and Clearbridge Appreciation.
Diversification Opportunities for Templeton Foreign and Clearbridge Appreciation
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and Clearbridge is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Foreign Fund and Clearbridge Appreciation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Appreciation 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 Clearbridge Appreciation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Appreciation has no effect on the direction of Templeton Foreign i.e., Templeton Foreign and Clearbridge Appreciation go up and down completely randomly.
Pair Corralation between Templeton Foreign and Clearbridge Appreciation
Assuming the 90 days horizon Templeton Foreign is expected to generate 3.19 times less return on investment than Clearbridge Appreciation. In addition to that, Templeton Foreign is 1.41 times more volatile than Clearbridge Appreciation Fund. It trades about 0.03 of its total potential returns per unit of risk. Clearbridge Appreciation Fund is currently generating about 0.13 per unit of volatility. If you would invest 3,104 in Clearbridge Appreciation Fund on August 26, 2024 and sell it today you would earn a total of 725.00 from holding Clearbridge Appreciation Fund or generate 23.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Foreign Fund vs. Clearbridge Appreciation Fund
Performance |
| Timeline |
| Templeton Foreign |
| Clearbridge Appreciation |
Templeton Foreign and Clearbridge Appreciation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Foreign and Clearbridge Appreciation
The main advantage of trading using opposite Templeton Foreign and Clearbridge Appreciation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Foreign position performs unexpectedly, Clearbridge Appreciation 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 Clearbridge Appreciation will offset losses from the drop in Clearbridge Appreciation's long position.| Templeton Foreign vs. Franklin Mutual Beacon | Templeton Foreign vs. Templeton Developing Markets | Templeton Foreign vs. Franklin Mutual Global | Templeton Foreign vs. Franklin Mutual Global |
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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