Correlation Between Navigator Tactical and Templeton Global

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

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

Diversification Opportunities for Navigator Tactical and Templeton Global

0.13

Correlation Coefficient

Navigator Tactical  Templeton Global

Average diversification

The 3 months correlation between Navigator and Templeton is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Tactical Fixed 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 Navigator Tactical 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 Navigator Tactical Fixed 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 Navigator Tactical i.e., Navigator Tactical and Templeton Global go up and down completely randomly.

Pair Corralation between Navigator Tactical and Templeton Global

Assuming the 90 days horizon Navigator Tactical Fixed is expected to generate 0.45 times more return on investment than Templeton Global. However, Navigator Tactical Fixed is 2.22 times less risky than Templeton Global. It trades about -0.3 of its potential returns per unit of risk. Templeton Global Bond is currently generating about -0.42 per unit of risk. If you would invest  981.00  in Navigator Tactical Fixed on January 20, 2024 and sell it today you would lose (15.00) from holding Navigator Tactical Fixed or give up 1.53% of portfolio value over 90 days.

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

Navigator Tactical Fixed  vs.  Templeton Global Bond

Navigator Tactical Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Navigator Tactical Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Navigator Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 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.

Pair Trading with Navigator Tactical and Templeton Global

The main advantage of trading using opposite Navigator Tactical and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navigator Tactical 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.

The idea behind Navigator Tactical Fixed and Templeton Global Bond 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.