Correlation Between Macquarie Global and Templeton Emerging

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

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

Diversification Opportunities for Macquarie Global and Templeton Emerging

0.0

Correlation Coefficient

Macquarie Global  Templeton Emerging

Pay attention - limited upside

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

Pair Corralation between Macquarie Global and Templeton Emerging

If you would invest  0.00  in Macquarie Global Infrastructure on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Macquarie Global Infrastructure or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.44%
Values	Daily Returns

Macquarie Global Infrastructur  vs.  Templeton Emerging Markets

Macquarie Global Inf

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Macquarie Global Infrastructure has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable technical and fundamental indicators, Macquarie Global is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Templeton Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Templeton Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. Despite latest fragile performance, the Fund's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the fund traders.

Pair Trading with Macquarie Global and Templeton Emerging

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

The idea behind Macquarie Global Infrastructure and Templeton Emerging Markets 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.