Correlation Between Templeton Growth and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Templeton Growth and Emerging Markets 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 Growth and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Growth Fund and Emerging Markets Portfolio, you can compare the effects of market volatilities on Templeton Growth and Emerging Markets 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 Growth with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Growth and Emerging Markets.
Diversification Opportunities for Templeton Growth and Emerging Markets
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Templeton and Emerging is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Growth Fund and Emerging Markets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Por and Templeton Growth 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 Growth Fund are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Por has no effect on the direction of Templeton Growth i.e., Templeton Growth and Emerging Markets go up and down completely randomly.
Pair Corralation between Templeton Growth and Emerging Markets
Assuming the 90 days horizon Templeton Growth Fund is expected to generate 0.79 times more return on investment than Emerging Markets. However, Templeton Growth Fund is 1.27 times less risky than Emerging Markets. It trades about 0.23 of its potential returns per unit of risk. Emerging Markets Portfolio is currently generating about -0.16 per unit of risk. If you would invest 2,731 in Templeton Growth Fund on September 4, 2024 and sell it today you would earn a total of 81.00 from holding Templeton Growth Fund or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Growth Fund vs. Emerging Markets Portfolio
Performance |
| Timeline |
| Templeton Growth |
| Emerging Markets Por |
Templeton Growth and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Growth and Emerging Markets
The main advantage of trading using opposite Templeton Growth and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Growth position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Templeton Growth vs. Prudential Financial Services | Templeton Growth vs. Financials Ultrasector Profund | Templeton Growth vs. Davis Financial Fund | Templeton Growth vs. Fidelity Advisor Financial |
| Emerging Markets vs. Legg Mason Partners | Emerging Markets vs. Jpmorgan Emerging Markets | Emerging Markets vs. T Rowe Price | Emerging Markets vs. Mondrian Emerging Markets |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |