Correlation Between Templeton Global and Victory Strategic

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

Diversification Opportunities for Templeton Global and Victory Strategic

0.22

Correlation Coefficient

Templeton Global  Victory Strategic

Modest diversification

The 3 months correlation between Templeton and Victory is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Bond and Victory Strategic Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Strategic 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 Victory Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Strategic has no effect on the direction of Templeton Global i.e., Templeton Global and Victory Strategic go up and down completely randomly.

Pair Corralation between Templeton Global and Victory Strategic

Assuming the 90 days horizon Templeton Global Bond is expected to generate 0.74 times more return on investment than Victory Strategic. However, Templeton Global Bond is 1.36 times less risky than Victory Strategic. It trades about 0.18 of its potential returns per unit of risk. Victory Strategic Allocation is currently generating about -0.02 per unit of risk. If you would invest  640.00  in Templeton Global Bond on December 30, 2024 and sell it today you would earn a total of  29.00  from holding Templeton Global Bond or generate 4.53% return on investment over 90 days.

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

Templeton Global Bond  vs.  Victory Strategic Allocation

Templeton Global Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Templeton Global Bond are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Templeton Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Victory Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Strategic Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Victory Strategic 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 Victory Strategic

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

The idea behind Templeton Global Bond and Victory Strategic Allocation 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .