Correlation Between Franklin Total and Voya Retirement
Can any of the company-specific risk be diversified away by investing in both Franklin Total and Voya Retirement 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 Total and Voya Retirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Total Return and Voya Retirement Moderate, you can compare the effects of market volatilities on Franklin Total and Voya Retirement 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 Total with a short position of Voya Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Total and Voya Retirement.
Diversification Opportunities for Franklin Total and Voya Retirement
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Voya is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Total Return and Voya Retirement Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Retirement Moderate and Franklin Total 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 Total Return are associated (or correlated) with Voya Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Retirement Moderate has no effect on the direction of Franklin Total i.e., Franklin Total and Voya Retirement go up and down completely randomly.
Pair Corralation between Franklin Total and Voya Retirement
Assuming the 90 days horizon Franklin Total is expected to generate 2.66 times less return on investment than Voya Retirement. In addition to that, Franklin Total is 1.04 times more volatile than Voya Retirement Moderate. It trades about 0.03 of its total potential returns per unit of risk. Voya Retirement Moderate is currently generating about 0.09 per unit of volatility. If you would invest 857.00 in Voya Retirement Moderate on November 5, 2024 and sell it today you would earn a total of 152.00 from holding Voya Retirement Moderate or generate 17.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Total Return vs. Voya Retirement Moderate
Performance |
| Timeline |
| Franklin Total Return |
| Voya Retirement Moderate |
Franklin Total and Voya Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Total and Voya Retirement
The main advantage of trading using opposite Franklin Total and Voya Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Total position performs unexpectedly, Voya Retirement 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 Retirement will offset losses from the drop in Voya Retirement's long position.| Franklin Total vs. Aqr Sustainable Long Short | Franklin Total vs. Nuveen Short Term | Franklin Total vs. Transam Short Term Bond | Franklin Total vs. Blackrock Short Obligations |
| Voya Retirement vs. Virtus Nfj Large Cap | Voya Retirement vs. Qs Large Cap | Voya Retirement vs. Fidelity Large Cap | Voya Retirement vs. Qs 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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