Correlation Between Vanguard Strategic and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Vanguard Strategic and Templeton 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 Vanguard Strategic and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Strategic Small Cap and Templeton Global Bond, you can compare the effects of market volatilities on Vanguard Strategic and Templeton 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 Vanguard Strategic with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Strategic and Templeton Global.
Diversification Opportunities for Vanguard Strategic and Templeton Global
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and Templeton is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Strategic Small Cap and Templeton Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Bond and Vanguard Strategic 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 Strategic Small Cap are associated (or correlated) with Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Bond has no effect on the direction of Vanguard Strategic i.e., Vanguard Strategic and Templeton Global go up and down completely randomly.
Pair Corralation between Vanguard Strategic and Templeton Global
Assuming the 90 days horizon Vanguard Strategic Small Cap is expected to generate 2.2 times more return on investment than Templeton Global. However, Vanguard Strategic is 2.2 times more volatile than Templeton Global Bond. It trades about 0.34 of its potential returns per unit of risk. Templeton Global Bond is currently generating about -0.04 per unit of risk. If you would invest 4,220 in Vanguard Strategic Small Cap on September 1, 2024 and sell it today you would earn a total of 466.00 from holding Vanguard Strategic Small Cap or generate 11.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Strategic Small Cap vs. Templeton Global Bond
Performance |
| Timeline |
| Vanguard Strategic |
| Templeton Global Bond |
Vanguard Strategic and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Strategic and Templeton Global
The main advantage of trading using opposite Vanguard Strategic and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Strategic position performs unexpectedly, Templeton 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 Templeton Global will offset losses from the drop in Templeton Global's long position.| Vanguard Strategic vs. Vanguard Explorer Value | Vanguard Strategic vs. Vanguard Strategic Equity | Vanguard Strategic vs. Vanguard Diversified Equity | Vanguard Strategic vs. Vanguard Mid Cap |
| Templeton Global vs. Franklin Mutual Beacon | Templeton Global vs. Templeton Developing Markets | Templeton Global vs. Franklin Mutual Global | Templeton Global vs. Franklin Mutual Global |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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