Correlation Between Templeton Global and Qs International

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

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

Diversification Opportunities for Templeton Global and Qs International

0.88

Correlation Coefficient

Templeton Global  Qs International

Very poor diversification

The 3 months correlation between Templeton and LGIEX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Bond and Qs International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs International Equity and Templeton 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 Templeton Global Bond are associated (or correlated) with Qs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs International Equity has no effect on the direction of Templeton Global i.e., Templeton Global and Qs International go up and down completely randomly.

Pair Corralation between Templeton Global and Qs International

Assuming the 90 days horizon Templeton Global Bond is expected to under-perform the Qs International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Templeton Global Bond is 1.53 times less risky than Qs International. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Qs International Equity is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,546  in Qs International Equity on October 3, 2024 and sell it today you would earn a total of  170.00  from holding Qs International Equity or generate 11.0% return on investment over 90 days.

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

Templeton Global Bond  vs.  Qs International Equity

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. In spite of latest weak performance, the Fund's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Qs International Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qs International Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Templeton Global and Qs International

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

The idea behind Templeton Global Bond and Qs International Equity 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.