Correlation Between Templeton Emerging and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Templeton Emerging and Mainstay Moderate 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 Mainstay Moderate 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 Mainstay Moderate Growth, you can compare the effects of market volatilities on Templeton Emerging and Mainstay Moderate 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 Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Emerging and Mainstay Moderate.
Diversification Opportunities for Templeton Emerging and Mainstay Moderate
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and Mainstay is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Emerging Markets and Mainstay Moderate Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate Growth 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 Mainstay Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate Growth has no effect on the direction of Templeton Emerging i.e., Templeton Emerging and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Templeton Emerging and Mainstay Moderate
Assuming the 90 days horizon Templeton Emerging Markets is expected to under-perform the Mainstay Moderate. But the mutual fund apears to be less risky and, when comparing its historical volatility, Templeton Emerging Markets is 1.14 times less risky than Mainstay Moderate. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Mainstay Moderate Growth is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,630 in Mainstay Moderate Growth on September 4, 2024 and sell it today you would earn a total of 76.00 from holding Mainstay Moderate Growth or generate 4.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Templeton Emerging Markets vs. Mainstay Moderate Growth
Performance |
| Timeline |
| Templeton Emerging |
| Mainstay Moderate Growth |
Templeton Emerging and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Emerging and Mainstay Moderate
The main advantage of trading using opposite Templeton Emerging and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Emerging position performs unexpectedly, Mainstay Moderate 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 Mainstay Moderate will offset losses from the drop in Mainstay Moderate'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 |
| Mainstay Moderate vs. Needham Aggressive Growth | Mainstay Moderate vs. Multimanager Lifestyle Aggressive | Mainstay Moderate vs. T Rowe Price | Mainstay Moderate vs. Western Asset High |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |