Correlation Between Franklin Real and Voya Vacs
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Voya Vacs 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 Real and Voya Vacs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Real Estate and Voya Vacs Index, you can compare the effects of market volatilities on Franklin Real and Voya Vacs 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 Real with a short position of Voya Vacs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Voya Vacs.
Diversification Opportunities for Franklin Real and Voya Vacs
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between FRANKLIN and Voya is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Voya Vacs Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Vacs Index and Franklin Real 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 Real Estate are associated (or correlated) with Voya Vacs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Vacs Index has no effect on the direction of Franklin Real i.e., Franklin Real and Voya Vacs go up and down completely randomly.
Pair Corralation between Franklin Real and Voya Vacs
Assuming the 90 days horizon Franklin Real is expected to generate 1.33 times less return on investment than Voya Vacs. In addition to that, Franklin Real is 1.27 times more volatile than Voya Vacs Index. It trades about 0.02 of its total potential returns per unit of risk. Voya Vacs Index is currently generating about 0.04 per unit of volatility. If you would invest 1,007 in Voya Vacs Index on September 3, 2024 and sell it today you would earn a total of 139.00 from holding Voya Vacs Index or generate 13.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.59% |
| Values | Daily Returns |
Franklin Real Estate vs. Voya Vacs Index
Performance |
| Timeline |
| Franklin Real Estate |
| Voya Vacs Index |
Franklin Real and Voya Vacs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Voya Vacs
The main advantage of trading using opposite Franklin Real and Voya Vacs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Voya Vacs 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 Vacs will offset losses from the drop in Voya Vacs' long position.| Franklin Real vs. Franklin Natural Resources | Franklin Real vs. Franklin Small Cap | Franklin Real vs. Templeton Developing Markets | Franklin Real vs. Franklin Balance Sheet |
| Voya Vacs vs. Franklin Mutual Global | Voya Vacs vs. Templeton Growth Fund | Voya Vacs vs. Franklin Real Estate | Voya Vacs vs. HUMANA INC |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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