Correlation Between Templeton Emerging and Calvert Income
Can any of the company-specific risk be diversified away by investing in both Templeton Emerging and Calvert Income 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 Emerging and Calvert Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Emerging Markets and Calvert Income Fund, you can compare the effects of market volatilities on Templeton Emerging and Calvert Income 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 Emerging with a short position of Calvert Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Emerging and Calvert Income.
Diversification Opportunities for Templeton Emerging and Calvert Income
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Templeton and Calvert is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Emerging Markets and Calvert Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Income and Templeton Emerging 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 Emerging Markets are associated (or correlated) with Calvert Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Income has no effect on the direction of Templeton Emerging i.e., Templeton Emerging and Calvert Income go up and down completely randomly.
Pair Corralation between Templeton Emerging and Calvert Income
Assuming the 90 days horizon Templeton Emerging Markets is expected to generate 1.73 times more return on investment than Calvert Income. However, Templeton Emerging is 1.73 times more volatile than Calvert Income Fund. It trades about 0.07 of its potential returns per unit of risk. Calvert Income Fund is currently generating about 0.06 per unit of risk. If you would invest 1,119 in Templeton Emerging Markets on September 5, 2024 and sell it today you would earn a total of 254.00 from holding Templeton Emerging Markets or generate 22.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Emerging Markets vs. Calvert Income Fund
Performance |
| Timeline |
| Templeton Emerging |
| Calvert Income |
Templeton Emerging and Calvert Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Emerging and Calvert Income
The main advantage of trading using opposite Templeton Emerging and Calvert Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Emerging position performs unexpectedly, Calvert Income 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 Calvert Income will offset losses from the drop in Calvert Income's long position.| Templeton Emerging vs. T Rowe Price | Templeton Emerging vs. T Rowe Price | Templeton Emerging vs. Legg Mason Partners | Templeton Emerging vs. Hood River New |
| Calvert Income vs. Templeton Emerging Markets | Calvert Income vs. T Rowe Price | Calvert Income vs. Commodities Strategy Fund | Calvert Income vs. Growth Strategy 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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