Correlation Between Vanguard Emerging and Templeton World
Can any of the company-specific risk be diversified away by investing in both Vanguard Emerging and Templeton World 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 Vanguard Emerging and Templeton World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Emerging Markets and Templeton World Fund, you can compare the effects of market volatilities on Vanguard Emerging and Templeton World 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 Vanguard Emerging with a short position of Templeton World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Templeton World.
Diversification Opportunities for Vanguard Emerging and Templeton World
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and Templeton is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets and Templeton World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton World and Vanguard Emerging 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 Vanguard Emerging Markets are associated (or correlated) with Templeton World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton World has no effect on the direction of Vanguard Emerging i.e., Vanguard Emerging and Templeton World go up and down completely randomly.
Pair Corralation between Vanguard Emerging and Templeton World
Assuming the 90 days horizon Vanguard Emerging Markets is expected to generate 1.02 times more return on investment than Templeton World. However, Vanguard Emerging is 1.02 times more volatile than Templeton World Fund. It trades about 0.26 of its potential returns per unit of risk. Templeton World Fund is currently generating about -0.02 per unit of risk. If you would invest 2,774 in Vanguard Emerging Markets on November 28, 2024 and sell it today you would earn a total of 106.00 from holding Vanguard Emerging Markets or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. Templeton World Fund
Performance |
| Timeline |
| Vanguard Emerging Markets |
| Templeton World |
Vanguard Emerging and Templeton World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and Templeton World
The main advantage of trading using opposite Vanguard Emerging and Templeton World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Emerging position performs unexpectedly, Templeton World 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 Templeton World will offset losses from the drop in Templeton World's long position.| Vanguard Emerging vs. T Rowe Price | Vanguard Emerging vs. John Hancock Variable | Vanguard Emerging vs. Tekla Healthcare Investors | Vanguard Emerging vs. Lord Abbett Health |
| Templeton World vs. Europac Gold Fund | Templeton World vs. Ocm Mutual Fund | Templeton World vs. Deutsche Gold Precious | Templeton World vs. International Investors Gold |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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