Correlation Between Templeton Strained and Catholic Responsible

Can any of the company-specific risk be diversified away by investing in both Templeton Strained and Catholic Responsible 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 Strained and Catholic Responsible into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Templeton Strained Bond and Catholic Responsible Investments, you can compare the effects of market volatilities on Templeton Strained and Catholic Responsible 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 Strained with a short position of Catholic Responsible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Strained and Catholic Responsible.

Diversification Opportunities for Templeton Strained and Catholic Responsible

0.64

Correlation Coefficient

Templeton Strained  Catholic Responsible

Poor diversification

The 3 months correlation between Templeton and Catholic is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Strained Bond and Catholic Responsible Investmen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catholic Responsible and Templeton Strained 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 Strained Bond are associated (or correlated) with Catholic Responsible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catholic Responsible has no effect on the direction of Templeton Strained i.e., Templeton Strained and Catholic Responsible go up and down completely randomly.

Pair Corralation between Templeton Strained and Catholic Responsible

Assuming the 90 days horizon Templeton Strained Bond is expected to under-perform the Catholic Responsible. But the mutual fund apears to be less risky and, when comparing its historical volatility, Templeton Strained Bond is 2.86 times less risky than Catholic Responsible. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Catholic Responsible Investments is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,224  in Catholic Responsible Investments on September 15, 2024 and sell it today you would earn a total of  103.00  from holding Catholic Responsible Investments or generate 8.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Templeton Strained Bond  vs.  Catholic Responsible Investmen

Templeton Strained Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Templeton Strained Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Templeton Strained is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catholic Responsible

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Catholic Responsible Investments are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Catholic Responsible may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Templeton Strained and Catholic Responsible

The main advantage of trading using opposite Templeton Strained and Catholic Responsible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Strained position performs unexpectedly, Catholic Responsible 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 Catholic Responsible will offset losses from the drop in Catholic Responsible's long position.

The idea behind Templeton Strained Bond and Catholic Responsible Investments pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.