Correlation Between Templeton Global and Clearbridge International
Can any of the company-specific risk be diversified away by investing in both Templeton Global and Clearbridge International 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 Clearbridge International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Global Smaller and Clearbridge International Value, you can compare the effects of market volatilities on Templeton Global and Clearbridge International 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 Clearbridge International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Clearbridge International.
Diversification Opportunities for Templeton Global and Clearbridge International
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Templeton and Clearbridge is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Smaller and Clearbridge International Valu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge International 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 Smaller are associated (or correlated) with Clearbridge International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge International has no effect on the direction of Templeton Global i.e., Templeton Global and Clearbridge International go up and down completely randomly.
Pair Corralation between Templeton Global and Clearbridge International
Assuming the 90 days horizon Templeton Global Smaller is expected to generate 0.93 times more return on investment than Clearbridge International. However, Templeton Global Smaller is 1.07 times less risky than Clearbridge International. It trades about 0.17 of its potential returns per unit of risk. Clearbridge International Value is currently generating about -0.02 per unit of risk. If you would invest 913.00 in Templeton Global Smaller on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Templeton Global Smaller or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Global Smaller vs. Clearbridge International Valu
Performance |
| Timeline |
| Templeton Global Smaller |
| Clearbridge International |
Templeton Global and Clearbridge International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Clearbridge International
The main advantage of trading using opposite Templeton Global and Clearbridge International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, Clearbridge International 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 Clearbridge International will offset losses from the drop in Clearbridge International's long position.| Templeton Global vs. Saat Moderate Strategy | Templeton Global vs. Moderately Aggressive Balanced | Templeton Global vs. Franklin Lifesmart Retirement | Templeton Global vs. Fidelity Managed Retirement |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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