Correlation Between Victory High and Franklin California
Can any of the company-specific risk be diversified away by investing in both Victory High and Franklin California 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 California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory High Yield and Franklin California High, you can compare the effects of market volatilities on Victory High and Franklin California 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 California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory High and Franklin California.
Diversification Opportunities for Victory High and Franklin California
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Victory and Franklin is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Victory High Yield and Franklin California High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California High 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 Yield are associated (or correlated) with Franklin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California High has no effect on the direction of Victory High i.e., Victory High and Franklin California go up and down completely randomly.
Pair Corralation between Victory High and Franklin California
Assuming the 90 days horizon Victory High Yield is expected to generate 0.8 times more return on investment than Franklin California. However, Victory High Yield is 1.24 times less risky than Franklin California. It trades about 0.2 of its potential returns per unit of risk. Franklin California High is currently generating about 0.14 per unit of risk. If you would invest 550.00 in Victory High Yield on November 27, 2024 and sell it today you would earn a total of 4.00 from holding Victory High Yield or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory High Yield vs. Franklin California High
Performance |
| Timeline |
| Victory High Yield |
| Franklin California High |
Victory High and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory High and Franklin California
The main advantage of trading using opposite Victory High and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory High position performs unexpectedly, Franklin California 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 California will offset losses from the drop in Franklin California's long position.| Victory High vs. T Rowe Price | Victory High vs. Alpine Ultra Short | Victory High vs. Ashmore Emerging Markets | Victory High vs. Calvert Short Duration |
| Franklin California vs. Franklin Mutual Beacon | Franklin California vs. Templeton Developing Markets | Franklin California vs. Franklin Mutual Global | Franklin California vs. Franklin Mutual Global |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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