Correlation Between Franklin Emerging and Voya Index
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Voya Index 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 Voya Index 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 Voya Index Plus, you can compare the effects of market volatilities on Franklin Emerging and Voya Index 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 Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Voya Index.
Diversification Opportunities for Franklin Emerging and Voya Index
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Voya is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Voya Index Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Plus 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 Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Plus has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Voya Index go up and down completely randomly.
Pair Corralation between Franklin Emerging and Voya Index
Assuming the 90 days horizon Franklin Emerging Market is expected to under-perform the Voya Index. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Emerging Market is 1.02 times less risky than Voya Index. The mutual fund trades about -0.29 of its potential returns per unit of risk. The Voya Index Plus is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 3,069 in Voya Index Plus on October 9, 2024 and sell it today you would lose (54.00) from holding Voya Index Plus or give up 1.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Voya Index Plus
Performance |
| Timeline |
| Franklin Emerging Market |
| Voya Index Plus |
Franklin Emerging and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Voya Index
The main advantage of trading using opposite Franklin Emerging and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Voya Index 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 Voya Index will offset losses from the drop in Voya Index's long position.| Franklin Emerging vs. Nuveen Short Term | Franklin Emerging vs. Aamhimco Short Duration | Franklin Emerging vs. Angel Oak Ultrashort | Franklin Emerging vs. Oakhurst Short Duration |
| Voya Index vs. Locorr Market Trend | Voya Index vs. T Rowe Price | Voya Index vs. Qs Large Cap | Voya Index vs. Tax Managed Large Cap |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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