Correlation Between Templeton Developing and Virtus Kar
Can any of the company-specific risk be diversified away by investing in both Templeton Developing and Virtus Kar 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 Developing and Virtus Kar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Developing Markets and Virtus Kar Small Cap, you can compare the effects of market volatilities on Templeton Developing and Virtus Kar 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 Developing with a short position of Virtus Kar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Developing and Virtus Kar.
Diversification Opportunities for Templeton Developing and Virtus Kar
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Templeton and Virtus is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Developing Markets and Virtus Kar Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Kar Small and Templeton Developing 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 Developing Markets are associated (or correlated) with Virtus Kar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Kar Small has no effect on the direction of Templeton Developing i.e., Templeton Developing and Virtus Kar go up and down completely randomly.
Pair Corralation between Templeton Developing and Virtus Kar
Assuming the 90 days horizon Templeton Developing Markets is expected to generate 0.9 times more return on investment than Virtus Kar. However, Templeton Developing Markets is 1.11 times less risky than Virtus Kar. It trades about 0.15 of its potential returns per unit of risk. Virtus Kar Small Cap is currently generating about -0.2 per unit of risk. If you would invest 2,345 in Templeton Developing Markets on September 7, 2025 and sell it today you would earn a total of 224.00 from holding Templeton Developing Markets or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Developing Markets vs. Virtus Kar Small Cap
Performance |
| Timeline |
| Templeton Developing |
| Virtus Kar Small |
Templeton Developing and Virtus Kar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Developing and Virtus Kar
The main advantage of trading using opposite Templeton Developing and Virtus Kar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Developing position performs unexpectedly, Virtus Kar 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 Virtus Kar will offset losses from the drop in Virtus Kar's long position.| Templeton Developing vs. Aqr Small Cap | Templeton Developing vs. Touchstone Small Cap | Templeton Developing vs. Qs Small Capitalization | Templeton Developing vs. Artisan Small Cap |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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