Correlation Between Franklin Federal and Voya Intermediate
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Voya Intermediate 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 Federal and Voya Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Federal Limited Term and Voya Intermediate Bond, you can compare the effects of market volatilities on Franklin Federal and Voya Intermediate 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 Federal with a short position of Voya Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Voya Intermediate.
Diversification Opportunities for Franklin Federal and Voya Intermediate
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Voya is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and Voya Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Intermediate Bond and Franklin Federal 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 Federal Limited Term are associated (or correlated) with Voya Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Intermediate Bond has no effect on the direction of Franklin Federal i.e., Franklin Federal and Voya Intermediate go up and down completely randomly.
Pair Corralation between Franklin Federal and Voya Intermediate
Assuming the 90 days horizon Franklin Federal is expected to generate 2.47 times less return on investment than Voya Intermediate. But when comparing it to its historical volatility, Franklin Federal Limited Term is 2.68 times less risky than Voya Intermediate. It trades about 0.28 of its potential returns per unit of risk. Voya Intermediate Bond is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,068 in Voya Intermediate Bond on December 1, 2024 and sell it today you would earn a total of 18.00 from holding Voya Intermediate Bond or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Federal Limited Term vs. Voya Intermediate Bond
Performance |
| Timeline |
| Franklin Federal Lim |
| Voya Intermediate Bond |
Franklin Federal and Voya Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Voya Intermediate
The main advantage of trading using opposite Franklin Federal and Voya Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Voya Intermediate 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 Intermediate will offset losses from the drop in Voya Intermediate's long position.| Franklin Federal vs. Doubleline Global Bond | Franklin Federal vs. Goldman Sachs Global | Franklin Federal vs. T Rowe Price | Franklin Federal vs. Wisdomtree Siegel Global |
| Voya Intermediate vs. Doubleline Emerging Markets | Voya Intermediate vs. Massmutual Premier E | Voya Intermediate vs. Rbc Bluebay Emerging | Voya Intermediate vs. Ms Global Fixed |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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