Correlation Between Templeton Constrained and North Square

Can any of the company-specific risk be diversified away by investing in both Templeton Constrained and North Square 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 Constrained and North Square 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 North Square Kennedy, you can compare the effects of market volatilities on Templeton Constrained and North Square 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 Constrained with a short position of North Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Constrained and North Square.

Diversification Opportunities for Templeton Constrained and North Square

0.0

Correlation Coefficient

Templeton Constrained  North Square

Pay attention - limited upside

The 3 months correlation between Templeton and North is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Strained Bond and North Square Kennedy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Square Kennedy and Templeton Constrained 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 North Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Square Kennedy has no effect on the direction of Templeton Constrained i.e., Templeton Constrained and North Square go up and down completely randomly.

Pair Corralation between Templeton Constrained and North Square

If you would invest  999.00  in Templeton Strained Bond on December 30, 2024 and sell it today you would earn a total of  21.00  from holding Templeton Strained Bond or generate 2.1% return on investment over 90 days.

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

Templeton Strained Bond  vs.  North Square Kennedy

Templeton Strained Bond

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Templeton Strained Bond are ranked lower than 44 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Templeton Constrained is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

North Square Kennedy

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Templeton Constrained and North Square

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

The idea behind Templeton Strained Bond and North Square Kennedy 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.