Correlation Between Invesco Euro and Templeton Global

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

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

Diversification Opportunities for Invesco Euro and Templeton Global

0.0

Correlation Coefficient

Invesco Euro  Templeton Global

Pay attention - limited upside

The 3 months correlation between Invesco and Templeton is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Euro Corporate 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 Invesco Euro 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 Invesco Euro Corporate 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 Invesco Euro i.e., Invesco Euro and Templeton Global go up and down completely randomly.

Pair Corralation between Invesco Euro and Templeton Global

If you would invest  1,866  in Invesco Euro Corporate on October 6, 2024 and sell it today you would earn a total of  12.00  from holding Invesco Euro Corporate or generate 0.64% return on investment over 90 days.

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

Invesco Euro Corporate  vs.  Templeton Global Bond

Invesco Euro Corporate

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Euro Corporate are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Invesco Euro is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Templeton Global Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Templeton Global Bond has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady basic indicators, Templeton Global is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Invesco Euro and Templeton Global

The main advantage of trading using opposite Invesco Euro and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Euro 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 Invesco Euro Corporate 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.