Correlation Between Franklin New and Victory High
Can any of the company-specific risk be diversified away by investing in both Franklin New and Victory High 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 New and Victory High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin New York and Victory High Yield, you can compare the effects of market volatilities on Franklin New and Victory High 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 New with a short position of Victory High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin New and Victory High.
Diversification Opportunities for Franklin New and Victory High
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Victory is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Franklin New York and Victory High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory High Yield and Franklin New 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 New York are associated (or correlated) with Victory High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory High Yield has no effect on the direction of Franklin New i.e., Franklin New and Victory High go up and down completely randomly.
Pair Corralation between Franklin New and Victory High
Assuming the 90 days horizon Franklin New is expected to generate 2.45 times less return on investment than Victory High. But when comparing it to its historical volatility, Franklin New York is 1.07 times less risky than Victory High. It trades about 0.07 of its potential returns per unit of risk. Victory High Yield is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 474.00 in Victory High Yield on September 2, 2024 and sell it today you would earn a total of 82.00 from holding Victory High Yield or generate 17.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin New York vs. Victory High Yield
Performance |
| Timeline |
| Franklin New York |
| Victory High Yield |
Franklin New and Victory High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin New and Victory High
The main advantage of trading using opposite Franklin New and Victory High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin New position performs unexpectedly, Victory High 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 High will offset losses from the drop in Victory High's long position.| Franklin New vs. Franklin Mutual Beacon | Franklin New vs. Templeton Developing Markets | Franklin New vs. Franklin Mutual Global | Franklin New vs. Franklin Mutual Global |
| Victory High vs. Tiaa Cref Lifestyle Moderate | Victory High vs. Pro Blend Moderate Term | Victory High vs. American Funds Retirement | Victory High vs. Blackrock Moderate Prepared |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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