Correlation Between Templeton Global and Aqr Global
Can any of the company-specific risk be diversified away by investing in both Templeton Global and Aqr 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 Aqr Global 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 Aqr Global Macro, you can compare the effects of market volatilities on Templeton Global and Aqr 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 Aqr Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Aqr Global.
Diversification Opportunities for Templeton Global and Aqr Global
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Templeton and Aqr is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Balanced and Aqr Global Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Global Macro 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 Aqr Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Global Macro has no effect on the direction of Templeton Global i.e., Templeton Global and Aqr Global go up and down completely randomly.
Pair Corralation between Templeton Global and Aqr Global
Assuming the 90 days horizon Templeton Global Balanced is expected to generate 1.11 times more return on investment than Aqr Global. However, Templeton Global is 1.11 times more volatile than Aqr Global Macro. It trades about 0.03 of its potential returns per unit of risk. Aqr Global Macro is currently generating about 0.0 per unit of risk. If you would invest 227.00 in Templeton Global Balanced on October 25, 2024 and sell it today you would earn a total of 20.00 from holding Templeton Global Balanced or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Global Balanced vs. Aqr Global Macro
Performance |
| Timeline |
| Templeton Global Balanced |
| Aqr Global Macro |
Templeton Global and Aqr Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Aqr Global
The main advantage of trading using opposite Templeton Global and Aqr Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, Aqr 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 Aqr Global will offset losses from the drop in Aqr Global's long position.| Templeton Global vs. Ultramid Cap Profund Ultramid Cap | Templeton Global vs. Heartland Value Plus | Templeton Global vs. Valic Company I | Templeton Global vs. Queens Road Small |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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