Correlation Between Rational Defensive and Templeton Global

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

By analyzing existing cross correlation between Rational Defensive Growth and Templeton Global Opportunities, you can compare the effects of market volatilities on Rational Defensive 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 Rational Defensive with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rational Defensive and Templeton Global.

Diversification Opportunities for Rational Defensive and Templeton Global

0.0

Correlation Coefficient

Rational Defensive  Templeton Global

Pay attention - limited upside

The 3 months correlation between Rational and Templeton is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rational Defensive Growth and Templeton Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Opp and Rational Defensive 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 Rational Defensive Growth 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 Opp has no effect on the direction of Rational Defensive i.e., Rational Defensive and Templeton Global go up and down completely randomly.

Pair Corralation between Rational Defensive and Templeton Global

If you would invest  3,588  in Rational Defensive Growth on September 12, 2024 and sell it today you would earn a total of  539.00  from holding Rational Defensive Growth or generate 15.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Rational Defensive Growth  vs.  Templeton Global Opportunities

Rational Defensive Growth

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rational Defensive Growth are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Rational Defensive showed solid returns over the last few months and may actually be approaching a breakup point.

Templeton Global Opp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Rational Defensive and Templeton Global

The main advantage of trading using opposite Rational Defensive and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rational Defensive 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.

The idea behind Rational Defensive Growth and Templeton Global Opportunities 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..