Correlation Between Templeton Emerging and Deutsche Short
Can any of the company-specific risk be diversified away by investing in both Templeton Emerging and Deutsche Short 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 Deutsche Short 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 Deutsche Short Duration, you can compare the effects of market volatilities on Templeton Emerging and Deutsche Short 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 Deutsche Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Emerging and Deutsche Short.
Diversification Opportunities for Templeton Emerging and Deutsche Short
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Templeton and Deutsche is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Emerging Markets and Deutsche Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Short Duration 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 Deutsche Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Short Duration has no effect on the direction of Templeton Emerging i.e., Templeton Emerging and Deutsche Short go up and down completely randomly.
Pair Corralation between Templeton Emerging and Deutsche Short
Assuming the 90 days horizon Templeton Emerging Markets is expected to generate 4.36 times more return on investment than Deutsche Short. However, Templeton Emerging is 4.36 times more volatile than Deutsche Short Duration. It trades about 0.08 of its potential returns per unit of risk. Deutsche Short Duration is currently generating about 0.18 per unit of risk. If you would invest 1,223 in Templeton Emerging Markets on September 4, 2024 and sell it today you would earn a total of 150.00 from holding Templeton Emerging Markets or generate 12.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Templeton Emerging Markets vs. Deutsche Short Duration
Performance |
| Timeline |
| Templeton Emerging |
| Deutsche Short Duration |
Templeton Emerging and Deutsche Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Emerging and Deutsche Short
The main advantage of trading using opposite Templeton Emerging and Deutsche Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Emerging position performs unexpectedly, Deutsche Short 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 Deutsche Short will offset losses from the drop in Deutsche Short's long position.| Templeton Emerging vs. Templeton Developing Markets | Templeton Emerging vs. Franklin Mutual Global | Templeton Emerging vs. Templeton Foreign Fund | Templeton Emerging vs. Templeton Foreign Fund |
| Deutsche Short vs. Fidelity Advisor Financial | Deutsche Short vs. Transamerica Financial Life | Deutsche Short vs. Angel Oak Financial | Deutsche Short vs. Gabelli Global Financial |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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