Correlation Between Fpa Crescent and Templeton Global

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

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

Diversification Opportunities for Fpa Crescent and Templeton Global

0.4

Correlation Coefficient

Fpa Crescent  Templeton Global

Very weak diversification

The 3 months correlation between Fpa and Templeton is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fpa Crescent Fund 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 Fpa Crescent 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 Fpa Crescent Fund 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 Fpa Crescent i.e., Fpa Crescent and Templeton Global go up and down completely randomly.

Pair Corralation between Fpa Crescent and Templeton Global

Assuming the 90 days horizon Fpa Crescent is expected to generate 3.77 times less return on investment than Templeton Global. In addition to that, Fpa Crescent is 1.4 times more volatile than Templeton Global Bond. It trades about 0.03 of its total potential returns per unit of risk. Templeton Global Bond is currently generating about 0.17 per unit of volatility. If you would invest  640.00  in Templeton Global Bond on December 29, 2024 and sell it today you would earn a total of  27.00  from holding Templeton Global Bond or generate 4.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Fpa Crescent Fund  vs.  Templeton Global Bond

Fpa Crescent

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fpa Crescent Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Fpa Crescent is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Templeton Global Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Templeton Global Bond are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. 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 Fpa Crescent and Templeton Global

The main advantage of trading using opposite Fpa Crescent and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fpa Crescent 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 Fpa Crescent Fund and Templeton Global Bond 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.