Correlation Between Templeton Global and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Templeton Global and Old Westbury 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 Old Westbury 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 Old Westbury Fixed, you can compare the effects of market volatilities on Templeton Global and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Old Westbury.
Diversification Opportunities for Templeton Global and Old Westbury
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Templeton and Old is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Balanced and Old Westbury Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Fixed 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Fixed has no effect on the direction of Templeton Global i.e., Templeton Global and Old Westbury go up and down completely randomly.
Pair Corralation between Templeton Global and Old Westbury
Assuming the 90 days horizon Templeton Global Balanced is expected to generate 2.61 times more return on investment than Old Westbury. However, Templeton Global is 2.61 times more volatile than Old Westbury Fixed. It trades about 0.03 of its potential returns per unit of risk. Old Westbury Fixed is currently generating about 0.05 per unit of risk. If you would invest 237.00 in Templeton Global Balanced on October 19, 2024 and sell it today you would earn a total of 5.00 from holding Templeton Global Balanced or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Global Balanced vs. Old Westbury Fixed
Performance |
| Timeline |
| Templeton Global Balanced |
| Old Westbury Fixed |
Templeton Global and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Old Westbury
The main advantage of trading using opposite Templeton Global and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Templeton Global vs. Wcm Focused Emerging | Templeton Global vs. Alphacentric Symmetry Strategy | Templeton Global vs. Oberweis Emerging Growth | Templeton Global vs. Siit Emerging Markets |
| Old Westbury vs. Ab E Opportunities | Old Westbury vs. Ips Strategic Capital | Old Westbury vs. Qs Large Cap | Old Westbury vs. Victory Rs Partners |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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