Correlation Between Templeton Emerging and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Templeton Emerging and Templeton Global 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 Templeton Global 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 Templeton Global Total, you can compare the effects of market volatilities on Templeton Emerging and Templeton Global 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 Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Emerging and Templeton Global.
Diversification Opportunities for Templeton Emerging and Templeton Global
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Templeton and Templeton is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Emerging Markets and Templeton Global Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Total 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 Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Total has no effect on the direction of Templeton Emerging i.e., Templeton Emerging and Templeton Global go up and down completely randomly.
Pair Corralation between Templeton Emerging and Templeton Global
Assuming the 90 days horizon Templeton Emerging Markets is expected to under-perform the Templeton Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Templeton Emerging Markets is 1.45 times less risky than Templeton Global. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Templeton Global Total is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 661.00 in Templeton Global Total on September 1, 2024 and sell it today you would lose (6.00) from holding Templeton Global Total or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Emerging Markets vs. Templeton Global Total
Performance |
| Timeline |
| Templeton Emerging |
| Templeton Global Total |
Templeton Emerging and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Emerging and Templeton Global
The main advantage of trading using opposite Templeton Emerging and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Emerging position performs unexpectedly, Templeton Global 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 Templeton Global will offset losses from the drop in Templeton Global's long position.| Templeton Emerging vs. Mutual Of America | Templeton Emerging vs. Fidelity Small Cap | Templeton Emerging vs. Palm Valley Capital | Templeton Emerging vs. Pace Smallmedium Value |
| Templeton Global vs. Franklin Mutual Beacon | Templeton Global vs. Templeton Developing Markets | Templeton Global vs. Franklin Mutual Global | Templeton Global 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |