Correlation Between Templeton Global and Gmo Global
Can any of the company-specific risk be diversified away by investing in both Templeton Global and Gmo Global 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 Gmo Global 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 Gmo Global Asset, you can compare the effects of market volatilities on Templeton Global and Gmo Global 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 Gmo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Gmo Global.
Diversification Opportunities for Templeton Global and Gmo Global
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Templeton and Gmo is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Bond and Gmo Global Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Global Asset 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 Gmo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Global Asset has no effect on the direction of Templeton Global i.e., Templeton Global and Gmo Global go up and down completely randomly.
Pair Corralation between Templeton Global and Gmo Global
Assuming the 90 days horizon Templeton Global Bond is expected to under-perform the Gmo Global. In addition to that, Templeton Global is 1.05 times more volatile than Gmo Global Asset. It trades about -0.02 of its total potential returns per unit of risk. Gmo Global Asset is currently generating about 0.09 per unit of volatility. If you would invest 3,047 in Gmo Global Asset on September 3, 2024 and sell it today you would earn a total of 361.00 from holding Gmo Global Asset or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Global Bond vs. Gmo Global Asset
Performance |
| Timeline |
| Templeton Global Bond |
| Gmo Global Asset |
Templeton Global and Gmo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Gmo Global
The main advantage of trading using opposite Templeton Global and Gmo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, Gmo Global 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 Gmo Global will offset losses from the drop in Gmo Global's long position.| Templeton Global vs. Blackrock Science Technology | Templeton Global vs. Pgim Jennison Technology | Templeton Global vs. Dreyfus Technology Growth | Templeton Global vs. Science Technology Fund |
| Gmo Global vs. Blackrock Gbl Alloc | Gmo Global vs. Ivy Asset Strategy | Gmo Global vs. Fpa Crescent Fund | Gmo Global vs. Templeton Global Bond |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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