Correlation Between Templeton Foreign and Sound Shore
Can any of the company-specific risk be diversified away by investing in both Templeton Foreign and Sound Shore 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 Sound Shore 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 Sound Shore Fund, you can compare the effects of market volatilities on Templeton Foreign and Sound Shore 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 Sound Shore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Foreign and Sound Shore.
Diversification Opportunities for Templeton Foreign and Sound Shore
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and Sound is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Foreign Fund and Sound Shore Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sound Shore Fund 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 Sound Shore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sound Shore Fund has no effect on the direction of Templeton Foreign i.e., Templeton Foreign and Sound Shore go up and down completely randomly.
Pair Corralation between Templeton Foreign and Sound Shore
Assuming the 90 days horizon Templeton Foreign Fund is expected to under-perform the Sound Shore. In addition to that, Templeton Foreign is 1.35 times more volatile than Sound Shore Fund. It trades about -0.17 of its total potential returns per unit of risk. Sound Shore Fund is currently generating about 0.33 per unit of volatility. If you would invest 4,726 in Sound Shore Fund on August 26, 2024 and sell it today you would earn a total of 261.00 from holding Sound Shore Fund or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Foreign Fund vs. Sound Shore Fund
Performance |
| Timeline |
| Templeton Foreign |
| Sound Shore Fund |
Templeton Foreign and Sound Shore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Foreign and Sound Shore
The main advantage of trading using opposite Templeton Foreign and Sound Shore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Foreign position performs unexpectedly, Sound Shore 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 Sound Shore will offset losses from the drop in Sound Shore'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 |
| Sound Shore vs. Hartford Schroders Smallmid | Sound Shore vs. Hartford Schroders Smallmid | Sound Shore vs. Praxis Growth Index | Sound Shore vs. Ab E Opportunities |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |