Correlation Between Templeton Constrained and Congress Large

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

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

Diversification Opportunities for Templeton Constrained and Congress Large

0.95

Correlation Coefficient

Templeton Constrained  Congress Large

Almost no diversification

The 3 months correlation between Templeton and Congress is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Strained Bond and Congress Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Congress Large Cap and Templeton Constrained 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 Strained Bond are associated (or correlated) with Congress Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Congress Large Cap has no effect on the direction of Templeton Constrained i.e., Templeton Constrained and Congress Large go up and down completely randomly.

Pair Corralation between Templeton Constrained and Congress Large

Assuming the 90 days horizon Templeton Constrained is expected to generate 2.69 times less return on investment than Congress Large. But when comparing it to its historical volatility, Templeton Strained Bond is 11.41 times less risky than Congress Large. It trades about 0.68 of its potential returns per unit of risk. Congress Large Cap is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  4,949  in Congress Large Cap on July 7, 2025 and sell it today you would earn a total of  325.00  from holding Congress Large Cap or generate 6.57% return on investment over 90 days.

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

Templeton Strained Bond  vs.  Congress Large Cap

Templeton Strained Bond

Risk-Adjusted Performance

Prime

Compared to the overall equity markets, risk-adjusted returns on investments in Templeton Strained Bond are ranked lower than 53 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Templeton Constrained is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Congress Large Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Congress Large Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Congress Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Templeton Constrained and Congress Large

The main advantage of trading using opposite Templeton Constrained and Congress Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Constrained position performs unexpectedly, Congress Large 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 Congress Large will offset losses from the drop in Congress Large's long position.

The idea behind Templeton Strained Bond and Congress Large Cap 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.