Correlation Between Templeton Foreign and Clearbridge Large
Can any of the company-specific risk be diversified away by investing in both Templeton Foreign 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 Foreign 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 Foreign Fund and Clearbridge Large Cap, you can compare the effects of market volatilities on Templeton Foreign 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 Foreign with a short position of Clearbridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Foreign and Clearbridge Large.
Diversification Opportunities for Templeton Foreign and Clearbridge Large
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and Clearbridge is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Foreign 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 Foreign 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 Foreign 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 Foreign i.e., Templeton Foreign and Clearbridge Large go up and down completely randomly.
Pair Corralation between Templeton Foreign and Clearbridge Large
Assuming the 90 days horizon Templeton Foreign Fund is expected to under-perform the Clearbridge Large. In addition to that, Templeton Foreign is 1.06 times more volatile than Clearbridge Large Cap. It trades about -0.2 of its total potential returns per unit of risk. Clearbridge Large Cap is currently generating about 0.17 per unit of volatility. 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Foreign Fund vs. Clearbridge Large Cap
Performance |
| Timeline |
| Templeton Foreign |
| Clearbridge Large Cap |
Templeton Foreign and Clearbridge Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Foreign and Clearbridge Large
The main advantage of trading using opposite Templeton Foreign and Clearbridge Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Foreign 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 Foreign vs. Morgan Stanley Government | Templeton Foreign vs. Matson Money Fixed | Templeton Foreign vs. Chestnut Street Exchange | Templeton Foreign vs. Cref Money Market |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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