Correlation Between Templeton World and Clearbridge Large
Can any of the company-specific risk be diversified away by investing in both Templeton World and Clearbridge Large 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 World and Clearbridge Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton World Fund and Clearbridge Large Cap, you can compare the effects of market volatilities on Templeton World and Clearbridge Large 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 World with a short position of Clearbridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton World and Clearbridge Large.
Diversification Opportunities for Templeton World and Clearbridge Large
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Templeton and Clearbridge is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Templeton World Fund and Clearbridge Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Large Cap and Templeton World 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 World Fund are associated (or correlated) with Clearbridge Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Large Cap has no effect on the direction of Templeton World i.e., Templeton World and Clearbridge Large go up and down completely randomly.
Pair Corralation between Templeton World and Clearbridge Large
Assuming the 90 days horizon Templeton World is expected to generate 315.0 times less return on investment than Clearbridge Large. But when comparing it to its historical volatility, Templeton World Fund is 1.15 times less risky than Clearbridge Large. It trades about 0.0 of its potential returns per unit of risk. Clearbridge Large Cap is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,429 in Clearbridge Large Cap on August 24, 2024 and sell it today you would earn a total of 152.00 from holding Clearbridge Large Cap or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Templeton World Fund vs. Clearbridge Large Cap
Performance |
| Timeline |
| Templeton World |
| Clearbridge Large Cap |
Templeton World and Clearbridge Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton World and Clearbridge Large
The main advantage of trading using opposite Templeton World and Clearbridge Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton World position performs unexpectedly, Clearbridge Large 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 Large will offset losses from the drop in Clearbridge Large's long position.| Templeton World vs. Biotechnology Ultrasector Profund | Templeton World vs. Hennessy Technology Fund | Templeton World vs. Invesco Technology Fund | Templeton World vs. Technology Ultrasector Profund |
| Clearbridge Large vs. Extended Market Index | Clearbridge Large vs. Origin Emerging Markets | Clearbridge Large vs. Shelton Emerging Markets | Clearbridge Large vs. Doubleline 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |