Correlation Between Voya Solution and Franklin High
Can any of the company-specific risk be diversified away by investing in both Voya Solution and Franklin 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 Voya Solution and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Solution Moderately and Franklin High Income, you can compare the effects of market volatilities on Voya Solution and Franklin 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 Voya Solution with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Solution and Franklin High.
Diversification Opportunities for Voya Solution and Franklin High
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Voya and Franklin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Voya Solution Moderately and Franklin High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Income and Voya Solution 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 Solution Moderately are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Income has no effect on the direction of Voya Solution i.e., Voya Solution and Franklin High go up and down completely randomly.
Pair Corralation between Voya Solution and Franklin High
Assuming the 90 days horizon Voya Solution is expected to generate 1.35 times less return on investment than Franklin High. In addition to that, Voya Solution is 1.26 times more volatile than Franklin High Income. It trades about 0.06 of its total potential returns per unit of risk. Franklin High Income is currently generating about 0.11 per unit of volatility. If you would invest 146.00 in Franklin High Income on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Franklin High Income or generate 20.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.61% |
| Values | Daily Returns |
Voya Solution Moderately vs. Franklin High Income
Performance |
| Timeline |
| Voya Solution Moderately |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Franklin High Income |
Voya Solution and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Solution and Franklin High
The main advantage of trading using opposite Voya Solution and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Solution position performs unexpectedly, Franklin 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 Franklin High will offset losses from the drop in Franklin High's long position.| Voya Solution vs. Columbia Global Technology | Voya Solution vs. Firsthand Technology Opportunities | Voya Solution vs. Biotechnology Ultrasector Profund | Voya Solution vs. Fidelity Advisor Technology |
| Franklin High vs. Vanguard High Yield Corporate | Franklin High vs. Vanguard High Yield Porate | Franklin High vs. Blackrock Hi Yld | Franklin High vs. Blackrock High Yield |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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