Correlation Between Vanguard Institutional and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both Vanguard Institutional and Templeton Growth 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 Vanguard Institutional and Templeton Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Institutional Intermediate Term and Templeton Growth Fund, you can compare the effects of market volatilities on Vanguard Institutional and Templeton Growth 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 Vanguard Institutional with a short position of Templeton Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Institutional and Templeton Growth.
Diversification Opportunities for Vanguard Institutional and Templeton Growth
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Templeton is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Institutional Interme and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Growth and Vanguard Institutional 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 Vanguard Institutional Intermediate Term are associated (or correlated) with Templeton Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Growth has no effect on the direction of Vanguard Institutional i.e., Vanguard Institutional and Templeton Growth go up and down completely randomly.
Pair Corralation between Vanguard Institutional and Templeton Growth
Assuming the 90 days horizon Vanguard Institutional is expected to generate 5.06 times less return on investment than Templeton Growth. But when comparing it to its historical volatility, Vanguard Institutional Intermediate Term is 6.1 times less risky than Templeton Growth. It trades about 0.11 of its potential returns per unit of risk. Templeton Growth Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,014 in Templeton Growth Fund on September 7, 2025 and sell it today you would earn a total of 125.00 from holding Templeton Growth Fund or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Institutional Interme vs. Templeton Growth Fund
Performance |
| Timeline |
| Vanguard Institutional |
| Templeton Growth |
Vanguard Institutional and Templeton Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Institutional and Templeton Growth
The main advantage of trading using opposite Vanguard Institutional and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Institutional position performs unexpectedly, Templeton Growth 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 Growth will offset losses from the drop in Templeton Growth's long position.The idea behind Vanguard Institutional Intermediate Term and Templeton Growth Fund 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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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 Stocks Directory module to find actively traded stocks across global markets.
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