Correlation Between Franklin Emerging and Victory High
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Victory High 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 Franklin Emerging and Victory High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Emerging Market and Victory High Yield, you can compare the effects of market volatilities on Franklin Emerging and Victory High 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 Franklin Emerging with a short position of Victory High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Victory High.
Diversification Opportunities for Franklin Emerging and Victory High
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FRANKLIN and Victory is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Victory High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory High Yield and Franklin Emerging 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 Franklin Emerging Market are associated (or correlated) with Victory High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory High Yield has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Victory High go up and down completely randomly.
Pair Corralation between Franklin Emerging and Victory High
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 0.94 times more return on investment than Victory High. However, Franklin Emerging Market is 1.06 times less risky than Victory High. It trades about 0.26 of its potential returns per unit of risk. Victory High Yield is currently generating about 0.18 per unit of risk. If you would invest 967.00 in Franklin Emerging Market on November 28, 2024 and sell it today you would earn a total of 223.00 from holding Franklin Emerging Market or generate 23.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Victory High Yield
Performance |
| Timeline |
| Franklin Emerging Market |
| Victory High Yield |
Franklin Emerging and Victory High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Victory High
The main advantage of trading using opposite Franklin Emerging and Victory High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Victory High 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 Victory High will offset losses from the drop in Victory High's long position.| Franklin Emerging vs. Jpmorgan Trust I | Franklin Emerging vs. Wilmington Funds | Franklin Emerging vs. Doubleline Emerging Markets | Franklin Emerging vs. Tiaa Cref Funds |
| Victory High vs. Ashmore Emerging Markets | Victory High vs. Cmg Ultra Short | Victory High vs. Catholic Responsible Investments | Victory High vs. Seix Govt Sec |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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