Correlation Between Templeton Global and Massachusetts Investors
Can any of the company-specific risk be diversified away by investing in both Templeton Global and Massachusetts Investors 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 Massachusetts Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Global Balanced and Massachusetts Investors Trust, you can compare the effects of market volatilities on Templeton Global and Massachusetts Investors 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 Massachusetts Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Massachusetts Investors.
Diversification Opportunities for Templeton Global and Massachusetts Investors
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Templeton and Massachusetts is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Balanced and Massachusetts Investors Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massachusetts Investors 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 Balanced are associated (or correlated) with Massachusetts Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massachusetts Investors has no effect on the direction of Templeton Global i.e., Templeton Global and Massachusetts Investors go up and down completely randomly.
Pair Corralation between Templeton Global and Massachusetts Investors
Assuming the 90 days horizon Templeton Global Balanced is expected to generate 0.88 times more return on investment than Massachusetts Investors. However, Templeton Global Balanced is 1.13 times less risky than Massachusetts Investors. It trades about 0.15 of its potential returns per unit of risk. Massachusetts Investors Trust is currently generating about 0.09 per unit of risk. If you would invest 265.00 in Templeton Global Balanced on June 10, 2025 and sell it today you would earn a total of 14.00 from holding Templeton Global Balanced or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Global Balanced vs. Massachusetts Investors Trust
Performance |
| Timeline |
| Templeton Global Balanced |
| Massachusetts Investors |
Templeton Global and Massachusetts Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Massachusetts Investors
The main advantage of trading using opposite Templeton Global and Massachusetts Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, Massachusetts Investors 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 Massachusetts Investors will offset losses from the drop in Massachusetts Investors' long position.| Templeton Global vs. T Rowe Price | Templeton Global vs. T Rowe Price | Templeton Global vs. Barings High Yield | Templeton Global vs. The Hartford High |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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