Correlation Between Lsv Small and Vy(r) Franklin
Can any of the company-specific risk be diversified away by investing in both Lsv Small and Vy(r) Franklin 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 Lsv Small and Vy(r) Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lsv Small Cap and Vy Franklin Income, you can compare the effects of market volatilities on Lsv Small and Vy(r) Franklin 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 Lsv Small with a short position of Vy(r) Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lsv Small and Vy(r) Franklin.
Diversification Opportunities for Lsv Small and Vy(r) Franklin
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lsv and Vy(r) is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Small Cap and Vy Franklin Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Franklin Income and Lsv Small 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 Lsv Small Cap are associated (or correlated) with Vy(r) Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Franklin Income has no effect on the direction of Lsv Small i.e., Lsv Small and Vy(r) Franklin go up and down completely randomly.
Pair Corralation between Lsv Small and Vy(r) Franklin
Assuming the 90 days horizon Lsv Small Cap is expected to under-perform the Vy(r) Franklin. In addition to that, Lsv Small is 2.39 times more volatile than Vy Franklin Income. It trades about -0.18 of its total potential returns per unit of risk. Vy Franklin Income is currently generating about 0.03 per unit of volatility. If you would invest 1,025 in Vy Franklin Income on October 29, 2024 and sell it today you would earn a total of 4.00 from holding Vy Franklin Income or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lsv Small Cap vs. Vy Franklin Income
Performance |
| Timeline |
| Lsv Small Cap |
| Vy Franklin Income |
Lsv Small and Vy(r) Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lsv Small and Vy(r) Franklin
The main advantage of trading using opposite Lsv Small and Vy(r) Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lsv Small position performs unexpectedly, Vy(r) Franklin 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 Vy(r) Franklin will offset losses from the drop in Vy(r) Franklin's long position.| Lsv Small vs. Amg Timessquare Mid | Lsv Small vs. Lsv Value Equity | Lsv Small vs. Baron Discovery Fund | Lsv Small vs. Victory Sycamore Established |
| Vy(r) Franklin vs. Ab Bond Inflation | Vy(r) Franklin vs. Ab Bond Inflation | Vy(r) Franklin vs. Aqr Managed Futures | Vy(r) Franklin vs. Credit Suisse Multialternative |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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