Correlation Between Templeton Emerging and Clearbridge International
Can any of the company-specific risk be diversified away by investing in both Templeton Emerging and Clearbridge International 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 Clearbridge International 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 Clearbridge International Growth, you can compare the effects of market volatilities on Templeton Emerging and Clearbridge International 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 Clearbridge International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Emerging and Clearbridge International.
Diversification Opportunities for Templeton Emerging and Clearbridge International
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Templeton and Clearbridge is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Emerging Markets and Clearbridge International Grow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge International 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 Clearbridge International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge International has no effect on the direction of Templeton Emerging i.e., Templeton Emerging and Clearbridge International go up and down completely randomly.
Pair Corralation between Templeton Emerging and Clearbridge International
Assuming the 90 days horizon Templeton Emerging is expected to generate 1.18 times less return on investment than Clearbridge International. But when comparing it to its historical volatility, Templeton Emerging Markets is 1.35 times less risky than Clearbridge International. It trades about 0.03 of its potential returns per unit of risk. Clearbridge International Growth is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,899 in Clearbridge International Growth on August 27, 2024 and sell it today you would earn a total of 208.00 from holding Clearbridge International Growth or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Emerging Markets vs. Clearbridge International Grow
Performance |
| Timeline |
| Templeton Emerging |
| Clearbridge International |
Templeton Emerging and Clearbridge International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Emerging and Clearbridge International
The main advantage of trading using opposite Templeton Emerging and Clearbridge International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Emerging position performs unexpectedly, Clearbridge International 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 International will offset losses from the drop in Clearbridge International's long position.| Templeton Emerging vs. Franklin Mutual Beacon | Templeton Emerging vs. Templeton Developing Markets | Templeton Emerging vs. Franklin Mutual Global | Templeton Emerging 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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