Correlation Between Templeton World and Jhancock Diversified
Can any of the company-specific risk be diversified away by investing in both Templeton World and Jhancock Diversified 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 World and Jhancock Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton World Fund and Jhancock Diversified Macro, you can compare the effects of market volatilities on Templeton World and Jhancock Diversified 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 World with a short position of Jhancock Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton World and Jhancock Diversified.
Diversification Opportunities for Templeton World and Jhancock Diversified
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Templeton and Jhancock is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Templeton World Fund and Jhancock Diversified Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Diversified and Templeton World 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 World Fund are associated (or correlated) with Jhancock Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Diversified has no effect on the direction of Templeton World i.e., Templeton World and Jhancock Diversified go up and down completely randomly.
Pair Corralation between Templeton World and Jhancock Diversified
Assuming the 90 days horizon Templeton World Fund is expected to generate 1.47 times more return on investment than Jhancock Diversified. However, Templeton World is 1.47 times more volatile than Jhancock Diversified Macro. It trades about 0.05 of its potential returns per unit of risk. Jhancock Diversified Macro is currently generating about -0.13 per unit of risk. If you would invest 1,781 in Templeton World Fund on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Templeton World Fund or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton World Fund vs. Jhancock Diversified Macro
Performance |
| Timeline |
| Templeton World |
| Jhancock Diversified |
Templeton World and Jhancock Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton World and Jhancock Diversified
The main advantage of trading using opposite Templeton World and Jhancock Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton World position performs unexpectedly, Jhancock Diversified 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 Jhancock Diversified will offset losses from the drop in Jhancock Diversified's long position.| Templeton World vs. Jhancock Diversified Macro | Templeton World vs. Evaluator Conservative Rms | Templeton World vs. American Funds Conservative | Templeton World vs. Guggenheim Diversified Income |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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