Correlation Between Champlain Small and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Champlain Small 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 Champlain Small and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Templeton Global Smaller, you can compare the effects of market volatilities on Champlain Small 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 Champlain Small with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Templeton Global.
Diversification Opportunities for Champlain Small and Templeton Global
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Champlain and Templeton is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Templeton Global Smaller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Smaller and Champlain Small 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 Champlain Small 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 Smaller has no effect on the direction of Champlain Small i.e., Champlain Small and Templeton Global go up and down completely randomly.
Pair Corralation between Champlain Small and Templeton Global
Assuming the 90 days horizon Champlain Small is expected to generate 1.13 times more return on investment than Templeton Global. However, Champlain Small is 1.13 times more volatile than Templeton Global Smaller. It trades about 0.1 of its potential returns per unit of risk. Templeton Global Smaller is currently generating about 0.1 per unit of risk. If you would invest 2,057 in Champlain Small on July 19, 2024 and sell it today you would earn a total of 275.00 from holding Champlain Small or generate 13.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Champlain Small vs. Templeton Global Smaller
Performance |
Timeline |
Champlain Small |
Templeton Global Smaller |
Champlain Small and Templeton Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Champlain Small and Templeton Global
The main advantage of trading using opposite Champlain Small and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small 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.Champlain Small vs. Champlain Mid Cap | Champlain Small vs. Aberdeen Select International | Champlain Small vs. Marsico 21st Century | Champlain Small vs. Diamond Hill Large |
Templeton Global vs. Franklin Mutual Beacon | Templeton Global vs. Templeton Developing Markets | Templeton Global vs. Franklin Mutual Global | Templeton Global vs. Franklin Mutual Global |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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