Correlation Between Templeton Global and Kinetics Small
Can any of the company-specific risk be diversified away by investing in both Templeton Global and Kinetics Small 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 Global and Kinetics Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Global Smaller and Kinetics Small Cap, you can compare the effects of market volatilities on Templeton Global and Kinetics Small 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 Global with a short position of Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Kinetics Small.
Diversification Opportunities for Templeton Global and Kinetics Small
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Templeton and Kinetics is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Smaller and Kinetics Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Small Cap and Templeton Global 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 Global Smaller are associated (or correlated) with Kinetics Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Small Cap has no effect on the direction of Templeton Global i.e., Templeton Global and Kinetics Small go up and down completely randomly.
Pair Corralation between Templeton Global and Kinetics Small
Assuming the 90 days horizon Templeton Global Smaller is expected to generate 0.21 times more return on investment than Kinetics Small. However, Templeton Global Smaller is 4.85 times less risky than Kinetics Small. It trades about -0.05 of its potential returns per unit of risk. Kinetics Small Cap is currently generating about -0.07 per unit of risk. If you would invest 1,023 in Templeton Global Smaller on September 12, 2024 and sell it today you would lose (8.00) from holding Templeton Global Smaller or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Global Smaller vs. Kinetics Small Cap
Performance |
| Timeline |
| Templeton Global Smaller |
| Kinetics Small Cap |
Templeton Global and Kinetics Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Kinetics Small
The main advantage of trading using opposite Templeton Global and Kinetics Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, Kinetics Small 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 Kinetics Small will offset losses from the drop in Kinetics Small's long position.| Templeton Global vs. Franklin Mutual Global | Templeton Global vs. Jhancock Global Equity | Templeton Global vs. Scharf Global Opportunity | Templeton Global vs. Siit Global Managed |
| Kinetics Small vs. Aqr Small Cap | Kinetics Small vs. Pace Smallmedium Value | Kinetics Small vs. Lebenthal Lisanti Small | Kinetics Small vs. Old Westbury Small |
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.
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