Correlation Between Voya Smallcap and Franklin Federal
Can any of the company-specific risk be diversified away by investing in both Voya Smallcap and Franklin Federal 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 Smallcap and Franklin Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Smallcap Opportunities and Franklin Federal Limited Term, you can compare the effects of market volatilities on Voya Smallcap and Franklin Federal 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 Smallcap with a short position of Franklin Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Smallcap and Franklin Federal.
Diversification Opportunities for Voya Smallcap and Franklin Federal
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Voya and Franklin is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Voya Smallcap Opportunities and Franklin Federal Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Federal Lim and Voya Smallcap 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 Smallcap Opportunities are associated (or correlated) with Franklin Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Federal Lim has no effect on the direction of Voya Smallcap i.e., Voya Smallcap and Franklin Federal go up and down completely randomly.
Pair Corralation between Voya Smallcap and Franklin Federal
Assuming the 90 days horizon Voya Smallcap Opportunities is expected to generate 12.62 times more return on investment than Franklin Federal. However, Voya Smallcap is 12.62 times more volatile than Franklin Federal Limited Term. It trades about 0.32 of its potential returns per unit of risk. Franklin Federal Limited Term is currently generating about 0.15 per unit of risk. If you would invest 2,326 in Voya Smallcap Opportunities on September 1, 2024 and sell it today you would earn a total of 261.00 from holding Voya Smallcap Opportunities or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Voya Smallcap Opportunities vs. Franklin Federal Limited Term
Performance |
| Timeline |
| Voya Smallcap Opport |
| Franklin Federal Lim |
Voya Smallcap and Franklin Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Smallcap and Franklin Federal
The main advantage of trading using opposite Voya Smallcap and Franklin Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Smallcap position performs unexpectedly, Franklin Federal 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 Federal will offset losses from the drop in Franklin Federal's long position.| Voya Smallcap vs. Franklin Federal Limited Term | Voya Smallcap vs. Sterling Capital Short | Voya Smallcap vs. Goldman Sachs Short Term | Voya Smallcap vs. Jhancock Short Duration |
| Franklin Federal vs. Small Midcap Dividend Income | Franklin Federal vs. Tax Managed Mid Small | Franklin Federal vs. Touchstone Small Cap | Franklin Federal vs. Jpmorgan Small Cap |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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