Correlation Between Franklin High and Victory Sycamore
Can any of the company-specific risk be diversified away by investing in both Franklin High and Victory Sycamore 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 Victory Sycamore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin High Yield and Victory Sycamore Small, you can compare the effects of market volatilities on Franklin High and Victory Sycamore 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 Victory Sycamore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Victory Sycamore.
Diversification Opportunities for Franklin High and Victory Sycamore
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Victory is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Victory Sycamore Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Sycamore Small 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 Yield are associated (or correlated) with Victory Sycamore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Sycamore Small has no effect on the direction of Franklin High i.e., Franklin High and Victory Sycamore go up and down completely randomly.
Pair Corralation between Franklin High and Victory Sycamore
Assuming the 90 days horizon Franklin High is expected to generate 7.82 times less return on investment than Victory Sycamore. But when comparing it to its historical volatility, Franklin High Yield is 3.82 times less risky than Victory Sycamore. It trades about 0.06 of its potential returns per unit of risk. Victory Sycamore Small is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,511 in Victory Sycamore Small on September 13, 2024 and sell it today you would earn a total of 313.00 from holding Victory Sycamore Small or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Victory Sycamore Small
Performance |
| Timeline |
| Franklin High Yield |
| Victory Sycamore Small |
Franklin High and Victory Sycamore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Victory Sycamore
The main advantage of trading using opposite Franklin High and Victory Sycamore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Victory Sycamore 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 Sycamore will offset losses from the drop in Victory Sycamore's long position.| Franklin High vs. Lebenthal Lisanti Small | Franklin High vs. Guidemark Smallmid Cap | Franklin High vs. Vy Columbia Small | Franklin High vs. Ab Small Cap |
| Victory Sycamore vs. Bbh Intermediate Municipal | Victory Sycamore vs. Morningstar Defensive Bond | Victory Sycamore vs. Versatile Bond Portfolio | Victory Sycamore vs. Dws Government Money |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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