Correlation Between Franklin High and Vy Goldman
Can any of the company-specific risk be diversified away by investing in both Franklin High and Vy Goldman 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 High and Vy Goldman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin High Income and Vy Goldman Sachs, you can compare the effects of market volatilities on Franklin High and Vy Goldman 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 High with a short position of Vy Goldman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Vy Goldman.
Diversification Opportunities for Franklin High and Vy Goldman
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and VGSBX is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Income and Vy Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Goldman Sachs and Franklin High 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 High Income are associated (or correlated) with Vy Goldman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Goldman Sachs has no effect on the direction of Franklin High i.e., Franklin High and Vy Goldman go up and down completely randomly.
Pair Corralation between Franklin High and Vy Goldman
Assuming the 90 days horizon Franklin High Income is expected to generate 0.58 times more return on investment than Vy Goldman. However, Franklin High Income is 1.74 times less risky than Vy Goldman. It trades about 0.11 of its potential returns per unit of risk. Vy Goldman Sachs is currently generating about 0.02 per unit of risk. If you would invest 144.00 in Franklin High Income on September 23, 2024 and sell it today you would earn a total of 31.00 from holding Franklin High Income or generate 21.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Income vs. Vy Goldman Sachs
Performance |
| Timeline |
| Franklin High Income |
| Vy Goldman Sachs |
Franklin High and Vy Goldman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Vy Goldman
The main advantage of trading using opposite Franklin High and Vy Goldman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Vy Goldman 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 Vy Goldman will offset losses from the drop in Vy Goldman's long position.| Franklin High vs. Franklin Mutual Beacon | Franklin High vs. Templeton Developing Markets | Franklin High vs. Franklin Mutual Global | Franklin High vs. Franklin Mutual Global |
| Vy Goldman vs. Needham Aggressive Growth | Vy Goldman vs. Franklin High Income | Vy Goldman vs. Fa 529 Aggressive | Vy Goldman vs. Copeland Risk Managed |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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