Correlation Between Templeton Global and Locorr Dynamic
Can any of the company-specific risk be diversified away by investing in both Templeton Global and Locorr Dynamic 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 Locorr Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Global Balanced and Locorr Dynamic Equity, you can compare the effects of market volatilities on Templeton Global and Locorr Dynamic 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 Locorr Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Locorr Dynamic.
Diversification Opportunities for Templeton Global and Locorr Dynamic
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Templeton and Locorr is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Balanced and Locorr Dynamic Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Dynamic Equity 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 Balanced are associated (or correlated) with Locorr Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Dynamic Equity has no effect on the direction of Templeton Global i.e., Templeton Global and Locorr Dynamic go up and down completely randomly.
Pair Corralation between Templeton Global and Locorr Dynamic
Assuming the 90 days horizon Templeton Global Balanced is expected to generate 1.18 times more return on investment than Locorr Dynamic. However, Templeton Global is 1.18 times more volatile than Locorr Dynamic Equity. It trades about 0.04 of its potential returns per unit of risk. Locorr Dynamic Equity is currently generating about 0.04 per unit of risk. If you would invest 223.00 in Templeton Global Balanced on October 31, 2024 and sell it today you would earn a total of 25.00 from holding Templeton Global Balanced or generate 11.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Global Balanced vs. Locorr Dynamic Equity
Performance |
| Timeline |
| Templeton Global Balanced |
| Locorr Dynamic Equity |
Templeton Global and Locorr Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Locorr Dynamic
The main advantage of trading using opposite Templeton Global and Locorr Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, Locorr Dynamic 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 Locorr Dynamic will offset losses from the drop in Locorr Dynamic's long position.| Templeton Global vs. Federated Government Income | Templeton Global vs. Great West Government Mortgage | Templeton Global vs. Sit Government Securities | Templeton Global vs. Schwab Government Money |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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