Correlation Between Templeton Global and Fpa Crescent

Can any of the company-specific risk be diversified away by investing in both Templeton Global and Fpa Crescent 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 Fpa Crescent 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 Fpa Crescent Fund, you can compare the effects of market volatilities on Templeton Global and Fpa Crescent 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 Fpa Crescent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Fpa Crescent.

Diversification Opportunities for Templeton Global and Fpa Crescent

-0.61

Correlation Coefficient

Templeton Global  Fpa Crescent

Excellent diversification

The 3 months correlation between Templeton and Fpa is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Bond and Fpa Crescent Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fpa Crescent 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 Fpa Crescent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fpa Crescent has no effect on the direction of Templeton Global i.e., Templeton Global and Fpa Crescent go up and down completely randomly.

Pair Corralation between Templeton Global and Fpa Crescent

Assuming the 90 days horizon Templeton Global Bond is expected to under-perform the Fpa Crescent. In addition to that, Templeton Global is 1.19 times more volatile than Fpa Crescent Fund. It trades about -0.19 of its total potential returns per unit of risk. Fpa Crescent Fund is currently generating about 0.21 per unit of volatility. If you would invest  4,073  in Fpa Crescent Fund on September 11, 2024 and sell it today you would earn a total of  264.00  from holding Fpa Crescent Fund or generate 6.48% return on investment over 90 days.

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

Templeton Global Bond  vs.  Fpa Crescent Fund

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 basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Fpa Crescent

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fpa Crescent Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Fpa Crescent 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 Global and Fpa Crescent

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

The idea behind Templeton Global Bond and Fpa Crescent Fund 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.