Correlation Between Templeton Emerging and Transamerica Emerging
Can any of the company-specific risk be diversified away by investing in both Templeton Emerging and Transamerica Emerging 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 Transamerica Emerging 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 Transamerica Emerging Markets, you can compare the effects of market volatilities on Templeton Emerging and Transamerica Emerging 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 Transamerica Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Emerging and Transamerica Emerging.
Diversification Opportunities for Templeton Emerging and Transamerica Emerging
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Templeton and Transamerica is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Emerging Markets and Transamerica Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Emerging 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 Transamerica Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Emerging has no effect on the direction of Templeton Emerging i.e., Templeton Emerging and Transamerica Emerging go up and down completely randomly.
Pair Corralation between Templeton Emerging and Transamerica Emerging
Assuming the 90 days horizon Templeton Emerging Markets is expected to generate 0.65 times more return on investment than Transamerica Emerging. However, Templeton Emerging Markets is 1.54 times less risky than Transamerica Emerging. It trades about 0.04 of its potential returns per unit of risk. Transamerica Emerging Markets is currently generating about 0.01 per unit of risk. If you would invest 1,382 in Templeton Emerging Markets on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Templeton Emerging Markets or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Templeton Emerging Markets vs. Transamerica Emerging Markets
Performance |
| Timeline |
| Templeton Emerging |
| Transamerica Emerging |
Templeton Emerging and Transamerica Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Emerging and Transamerica Emerging
The main advantage of trading using opposite Templeton Emerging and Transamerica Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Emerging position performs unexpectedly, Transamerica Emerging 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 Transamerica Emerging will offset losses from the drop in Transamerica Emerging's long position.| Templeton Emerging vs. Guidemark Smallmid Cap | Templeton Emerging vs. Siit Small Mid | Templeton Emerging vs. Mutual Of America | Templeton Emerging vs. Aqr Small Cap |
| Transamerica Emerging vs. American Funds New | Transamerica Emerging vs. SCOR PK | Transamerica Emerging vs. Morningstar Unconstrained Allocation | Transamerica Emerging vs. Via Renewables |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |