Correlation Between Victory High and Franklin Utilities
Can any of the company-specific risk be diversified away by investing in both Victory High and Franklin Utilities 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 Victory High and Franklin Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory High Income and Franklin Utilities Fund, you can compare the effects of market volatilities on Victory High and Franklin Utilities 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 Victory High with a short position of Franklin Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory High and Franklin Utilities.
Diversification Opportunities for Victory High and Franklin Utilities
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VICTORY and Franklin is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Victory High Income and Franklin Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Utilities and Victory 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 Victory High Income are associated (or correlated) with Franklin Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Utilities has no effect on the direction of Victory High i.e., Victory High and Franklin Utilities go up and down completely randomly.
Pair Corralation between Victory High and Franklin Utilities
Assuming the 90 days horizon Victory High is expected to generate 1.45 times less return on investment than Franklin Utilities. But when comparing it to its historical volatility, Victory High Income is 2.91 times less risky than Franklin Utilities. It trades about 0.09 of its potential returns per unit of risk. Franklin Utilities Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,104 in Franklin Utilities Fund on August 30, 2024 and sell it today you would earn a total of 471.00 from holding Franklin Utilities Fund or generate 22.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory High Income vs. Franklin Utilities Fund
Performance |
| Timeline |
| Victory High Income |
| Franklin Utilities |
Victory High and Franklin Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory High and Franklin Utilities
The main advantage of trading using opposite Victory High and Franklin Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory High position performs unexpectedly, Franklin Utilities 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 Utilities will offset losses from the drop in Franklin Utilities' long position.| Victory High vs. Nuveen High Yield | Victory High vs. Nuveen High Yield | Victory High vs. Nuveen High Yield | Victory High vs. American High Income Municipal |
| Franklin Utilities vs. Siit High Yield | Franklin Utilities vs. Lgm Risk Managed | Franklin Utilities vs. Victory High Income | Franklin Utilities vs. Artisan High Income |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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