Correlation Between Templeton Emerging and Destinations Large

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

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

Diversification Opportunities for Templeton Emerging and Destinations Large

0.0

Correlation Coefficient

Templeton Emerging  Destinations Large

Pay attention - limited upside

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

Pair Corralation between Templeton Emerging and Destinations Large

If you would invest  1,190  in Templeton Emerging Markets on October 4, 2024 and sell it today you would earn a total of  174.00  from holding Templeton Emerging Markets or generate 14.62% return on investment over 90 days.

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

Templeton Emerging Markets  vs.  Destinations Large Cap

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. In spite of fairly strong primary indicators, Templeton Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Destinations Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Destinations Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Destinations Large 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 Emerging and Destinations Large

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

The idea behind Templeton Emerging Markets and Destinations Large Cap 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.