Correlation Between Foreign Bond and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Foreign Bond and Templeton Global 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 Foreign Bond and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foreign Bond Fund and Templeton Global Bond, you can compare the effects of market volatilities on Foreign Bond and Templeton Global 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 Foreign Bond with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foreign Bond and Templeton Global.
Diversification Opportunities for Foreign Bond and Templeton Global
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Foreign and Templeton is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding FOREIGN BOND FUND and TEMPLETON GLOBAL BOND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Bond and Foreign Bond 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 Foreign Bond Fund are associated (or correlated) with Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Bond has no effect on the direction of Foreign Bond i.e., Foreign Bond and Templeton Global go up and down completely randomly.
Pair Corralation between Foreign Bond and Templeton Global
Assuming the 90 days horizon Foreign Bond Fund is expected to generate 0.97 times more return on investment than Templeton Global. However, Foreign Bond Fund is 1.03 times less risky than Templeton Global. It trades about -0.03 of its potential returns per unit of risk. Templeton Global Bond is currently generating about -0.03 per unit of risk. If you would invest 819.00 in Foreign Bond Fund on December 30, 2023 and sell it today you would lose (64.00) from holding Foreign Bond Fund or give up 7.81% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 99.8% |
Values | Daily Returns |
FOREIGN BOND FUND vs. TEMPLETON GLOBAL BOND
Performance |
Timeline |
Foreign Bond Fund |
Templeton Global Bond |
Foreign Bond and Templeton Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Foreign Bond and Templeton Global
The main advantage of trading using opposite Foreign Bond and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foreign Bond position performs unexpectedly, Templeton Global 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 Global will offset losses from the drop in Templeton Global's long position.Foreign Bond vs. Templeton Global Bond | Foreign Bond vs. Templeton Global Bond | Foreign Bond vs. Capital World Bond | Foreign Bond vs. Capital World Bond |
Templeton Global vs. Templeton Global Bond | Templeton Global vs. Capital World Bond | Templeton Global vs. Capital World Bond | Templeton Global vs. Capital World Bond |
Check out your portfolio center.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.
Other Complementary Tools
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |