Correlation Between Templeton Global and FF Global
Can any of the company-specific risk be diversified away by investing in both Templeton Global and FF 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 Global and FF Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Global AD and FF Global, you can compare the effects of market volatilities on Templeton Global and FF 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 Global with a short position of FF Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and FF Global.
Diversification Opportunities for Templeton Global and FF Global
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Templeton and FJ2P is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global AD and FF Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FF Global and Templeton Global 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 Global AD are associated (or correlated) with FF Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FF Global has no effect on the direction of Templeton Global i.e., Templeton Global and FF Global go up and down completely randomly.
Pair Corralation between Templeton Global and FF Global
Assuming the 90 days trading horizon Templeton Global is expected to generate 4.35 times less return on investment than FF Global. But when comparing it to its historical volatility, Templeton Global AD is 1.43 times less risky than FF Global. It trades about 0.02 of its potential returns per unit of risk. FF Global is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,253 in FF Global on September 3, 2024 and sell it today you would earn a total of 1,074 from holding FF Global or generate 17.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.5% |
| Values | Daily Returns |
Templeton Global AD vs. FF Global
Performance |
| Timeline |
| Templeton Global |
| FF Global |
Templeton Global and FF Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and FF Global
The main advantage of trading using opposite Templeton Global and FF Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, FF 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 FF Global will offset losses from the drop in FF Global's long position.| Templeton Global vs. Groupama Entreprises N | Templeton Global vs. Renaissance Europe C | Templeton Global vs. Superior Plus Corp | Templeton Global vs. Origin Agritech |
| FF Global vs. Groupama Entreprises N | FF Global vs. Renaissance Europe C | FF Global vs. Superior Plus Corp | FF Global vs. Origin Agritech |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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