Correlation Between Voya High and Franklin Emerging
Can any of the company-specific risk be diversified away by investing in both Voya High and Franklin Emerging 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 Voya High and Franklin Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya High Yield and Franklin Emerging Market, you can compare the effects of market volatilities on Voya High and Franklin Emerging 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 Voya High with a short position of Franklin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Franklin Emerging.
Diversification Opportunities for Voya High and Franklin Emerging
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and FRANKLIN is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Franklin Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Emerging Market and Voya High 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 Voya High Yield are associated (or correlated) with Franklin Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Emerging Market has no effect on the direction of Voya High i.e., Voya High and Franklin Emerging go up and down completely randomly.
Pair Corralation between Voya High and Franklin Emerging
Assuming the 90 days horizon Voya High is expected to generate 1.56 times less return on investment than Franklin Emerging. In addition to that, Voya High is 1.0 times more volatile than Franklin Emerging Market. It trades about 0.32 of its total potential returns per unit of risk. Franklin Emerging Market is currently generating about 0.49 per unit of volatility. If you would invest 1,151 in Franklin Emerging Market on October 29, 2024 and sell it today you would earn a total of 23.00 from holding Franklin Emerging Market or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya High Yield vs. Franklin Emerging Market
Performance |
| Timeline |
| Voya High Yield |
| Franklin Emerging Market |
Voya High and Franklin Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Franklin Emerging
The main advantage of trading using opposite Voya High and Franklin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High position performs unexpectedly, Franklin Emerging 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 Franklin Emerging will offset losses from the drop in Franklin Emerging's long position.| Voya High vs. Allianzgi Convertible Income | Voya High vs. Gabelli Convertible And | Voya High vs. Lord Abbett Convertible | Voya High vs. Allianzgi Convertible Income |
| Franklin Emerging vs. Jhancock Real Estate | Franklin Emerging vs. Vanguard Reit Index | Franklin Emerging vs. Simt Real Estate | Franklin Emerging vs. Vy Clarion Real |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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