Correlation Between Franklin Federal and Voya Index
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Voya Index 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 Index 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 Index Solution, you can compare the effects of market volatilities on Franklin Federal and Voya Index 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 Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Voya Index.
Diversification Opportunities for Franklin Federal and Voya Index
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Voya is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution 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 Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Franklin Federal i.e., Franklin Federal and Voya Index go up and down completely randomly.
Pair Corralation between Franklin Federal and Voya Index
Assuming the 90 days horizon Franklin Federal Limited Term is expected to generate 0.13 times more return on investment than Voya Index. However, Franklin Federal Limited Term is 7.59 times less risky than Voya Index. It trades about 0.24 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.01 per unit of risk. If you would invest 1,021 in Franklin Federal Limited Term on December 11, 2024 and sell it today you would earn a total of 11.00 from holding Franklin Federal Limited Term or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.56% |
| Values | Daily Returns |
Franklin Federal Limited Term vs. Voya Index Solution
Performance |
| Timeline |
| Franklin Federal Lim |
| Voya Index Solution |
Franklin Federal and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Voya Index
The main advantage of trading using opposite Franklin Federal and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Voya Index 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 Index will offset losses from the drop in Voya Index's long position.| Franklin Federal vs. Qs International Equity | Franklin Federal vs. Gmo Global Equity | Franklin Federal vs. Rbc China Equity | Franklin Federal vs. Artisan Select Equity |
| Voya Index vs. Nuveen Global Real | Voya Index vs. Barings Global Floating | Voya Index vs. Morningstar Global Income | Voya Index vs. Aqr Global Macro |
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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