Correlation Between Franklin Liberty and VictoryShares ESG
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty and VictoryShares ESG 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 Liberty and VictoryShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Liberty Senior and VictoryShares ESG Corporate, you can compare the effects of market volatilities on Franklin Liberty and VictoryShares ESG 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 Liberty with a short position of VictoryShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and VictoryShares ESG.
Diversification Opportunities for Franklin Liberty and VictoryShares ESG
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and VictoryShares is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty Senior and VictoryShares ESG Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares ESG and Franklin Liberty 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 Liberty Senior are associated (or correlated) with VictoryShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares ESG has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and VictoryShares ESG go up and down completely randomly.
Pair Corralation between Franklin Liberty and VictoryShares ESG
Given the investment horizon of 90 days Franklin Liberty Senior is expected to generate 0.51 times more return on investment than VictoryShares ESG. However, Franklin Liberty Senior is 1.97 times less risky than VictoryShares ESG. It trades about 0.19 of its potential returns per unit of risk. VictoryShares ESG Corporate is currently generating about 0.05 per unit of risk. If you would invest 1,977 in Franklin Liberty Senior on September 3, 2024 and sell it today you would earn a total of 454.00 from holding Franklin Liberty Senior or generate 22.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Liberty Senior vs. VictoryShares ESG Corporate
Performance |
| Timeline |
| Franklin Liberty Senior |
| VictoryShares ESG |
Franklin Liberty and VictoryShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Liberty and VictoryShares ESG
The main advantage of trading using opposite Franklin Liberty and VictoryShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty position performs unexpectedly, VictoryShares ESG 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 VictoryShares ESG will offset losses from the drop in VictoryShares ESG's long position.| Franklin Liberty vs. SPDR Blackstone Senior | Franklin Liberty vs. Janus Detroit Street | Franklin Liberty vs. Pacer Pacific Asset |
| VictoryShares ESG vs. First Trust SSI | VictoryShares ESG vs. Franklin Liberty Senior | VictoryShares ESG vs. SPDR Bloomberg Convertible | VictoryShares ESG vs. Fidelity Preferred Securities |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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