Correlation Between Templeton Global and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Templeton Global and Fidelity Advisor 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 Fidelity Advisor 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 Fidelity Advisor Health, you can compare the effects of market volatilities on Templeton Global and Fidelity Advisor 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 Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Fidelity Advisor.
Diversification Opportunities for Templeton Global and Fidelity Advisor
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Templeton and Fidelity is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Bond and Fidelity Advisor Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Health 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Health has no effect on the direction of Templeton Global i.e., Templeton Global and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Templeton Global and Fidelity Advisor
Assuming the 90 days horizon Templeton Global Bond is expected to under-perform the Fidelity Advisor. But the mutual fund apears to be less risky and, when comparing its historical volatility, Templeton Global Bond is 1.49 times less risky than Fidelity Advisor. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Fidelity Advisor Health is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,509 in Fidelity Advisor Health on September 1, 2024 and sell it today you would earn a total of 415.00 from holding Fidelity Advisor Health or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Global Bond vs. Fidelity Advisor Health
Performance |
| Timeline |
| Templeton Global Bond |
| Fidelity Advisor Health |
Templeton Global and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Fidelity Advisor
The main advantage of trading using opposite Templeton Global and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.| Templeton Global vs. Franklin Mutual Beacon | Templeton Global vs. Templeton Developing Markets | Templeton Global vs. Franklin Mutual Global | Templeton Global vs. Franklin Mutual Global |
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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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