Correlation Between Alliancebernstein and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein 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 Alliancebernstein and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliancebernstein Global Highome and Templeton Global Balanced, you can compare the effects of market volatilities on Alliancebernstein 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 Alliancebernstein with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Templeton Global.
Diversification Opportunities for Alliancebernstein and Templeton Global
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alliancebernstein and Templeton is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global Higho and Templeton Global Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Balanced and Alliancebernstein 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 Alliancebernstein Global Highome 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 Balanced has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Templeton Global go up and down completely randomly.
Pair Corralation between Alliancebernstein and Templeton Global
Assuming the 90 days horizon Alliancebernstein is expected to generate 3.65 times less return on investment than Templeton Global. But when comparing it to its historical volatility, Alliancebernstein Global Highome is 2.88 times less risky than Templeton Global. It trades about 0.21 of its potential returns per unit of risk. Templeton Global Balanced is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 241.00 in Templeton Global Balanced on November 5, 2024 and sell it today you would earn a total of 7.00 from holding Templeton Global Balanced or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliancebernstein Global Higho vs. Templeton Global Balanced
Performance |
| Timeline |
| Alliancebernstein |
| Templeton Global Balanced |
Alliancebernstein and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Templeton Global
The main advantage of trading using opposite Alliancebernstein and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein 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.| Alliancebernstein vs. Balanced Strategy Fund | Alliancebernstein vs. Aqr Sustainable Long Short | Alliancebernstein vs. Barings Active Short | Alliancebernstein vs. Kinetics Market Opportunities |
| Templeton Global vs. Barings Emerging Markets | Templeton Global vs. Vy Jpmorgan Emerging | Templeton Global vs. Balanced Strategy Fund | Templeton Global vs. Investec Emerging Markets |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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