Correlation Between Franklin Emerging and Voya Global
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Voya Global 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 Global 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 Global Equity, you can compare the effects of market volatilities on Franklin Emerging and Voya Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Voya Global.
Diversification Opportunities for Franklin Emerging and Voya Global
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Voya is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Voya Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Equity 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Global Equity has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Voya Global go up and down completely randomly.
Pair Corralation between Franklin Emerging and Voya Global
Assuming the 90 days horizon Franklin Emerging is expected to generate 1.08 times less return on investment than Voya Global. But when comparing it to its historical volatility, Franklin Emerging Market is 2.3 times less risky than Voya Global. It trades about 0.27 of its potential returns per unit of risk. Voya Global Equity is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,567 in Voya Global Equity on September 14, 2024 and sell it today you would earn a total of 724.00 from holding Voya Global Equity or generate 20.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Franklin Emerging Market vs. Voya Global Equity
Performance |
| Timeline |
| Franklin Emerging Market |
| Voya Global Equity |
Franklin Emerging and Voya Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Voya Global
The main advantage of trading using opposite Franklin Emerging and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Voya Global 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 Global will offset losses from the drop in Voya Global's long position.| Franklin Emerging vs. Alger Health Sciences | Franklin Emerging vs. Highland Longshort Healthcare | Franklin Emerging vs. Baron Health Care | Franklin Emerging vs. Tekla Healthcare Opportunities |
| Voya Global vs. Franklin Emerging Market | Voya Global vs. Transamerica Emerging Markets | Voya Global vs. Origin Emerging Markets | Voya Global vs. Mid Cap 15x Strategy |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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