Correlation Between Templeton Global and Templeton Emerging
Can any of the company-specific risk be diversified away by investing in both Templeton Global and Templeton 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 Global and Templeton Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Global Bond and Templeton Emerging Mkt, you can compare the effects of market volatilities on Templeton Global and Templeton 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 Global with a short position of Templeton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Templeton Emerging.
Diversification Opportunities for Templeton Global and Templeton Emerging
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Templeton and Templeton is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Bond and Templeton Emerging Mkt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Emerging Mkt 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 Bond are associated (or correlated) with Templeton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Emerging Mkt has no effect on the direction of Templeton Global i.e., Templeton Global and Templeton Emerging go up and down completely randomly.
Pair Corralation between Templeton Global and Templeton Emerging
Assuming the 90 days trading horizon Templeton Global is expected to generate 5.29 times less return on investment than Templeton Emerging. But when comparing it to its historical volatility, Templeton Global Bond is 1.21 times less risky than Templeton Emerging. It trades about 0.01 of its potential returns per unit of risk. Templeton Emerging Mkt is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 641.00 in Templeton Emerging Mkt on September 13, 2024 and sell it today you would earn a total of 2.00 from holding Templeton Emerging Mkt or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Templeton Global Bond vs. Templeton Emerging Mkt
Performance |
| Timeline |
| Templeton Global Bond |
| Templeton Emerging Mkt |
Templeton Global and Templeton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Templeton Emerging
The main advantage of trading using opposite Templeton Global and Templeton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, Templeton 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 Templeton Emerging will offset losses from the drop in Templeton Emerging'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 |
| Templeton Emerging vs. Templeton Global Bond | Templeton Emerging vs. Templeton Asian Bond | Templeton Emerging vs. Templeton Global Bond | Templeton Emerging vs. Esfera Robotics R |
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
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |