Correlation Between Valic Company and Franklin High
Can any of the company-specific risk be diversified away by investing in both Valic Company 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 Valic Company and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and Franklin High Yield, you can compare the effects of market volatilities on Valic Company 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 Valic Company with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Franklin High.
Diversification Opportunities for Valic Company and Franklin High
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Valic and Franklin is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield and Valic Company 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 Valic Company I 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 Yield has no effect on the direction of Valic Company i.e., Valic Company and Franklin High go up and down completely randomly.
Pair Corralation between Valic Company and Franklin High
Assuming the 90 days horizon Valic Company I is expected to under-perform the Franklin High. In addition to that, Valic Company is 4.13 times more volatile than Franklin High Yield. It trades about -0.28 of its total potential returns per unit of risk. Franklin High Yield is currently generating about -0.38 per unit of volatility. If you would invest 915.00 in Franklin High Yield on September 28, 2024 and sell it today you would lose (20.00) from holding Franklin High Yield or give up 2.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Franklin High Yield
Performance |
| Timeline |
| Valic Company I |
| Franklin High Yield |
Valic Company and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Franklin High
The main advantage of trading using opposite Valic Company and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company 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.| Valic Company vs. Mid Cap Index | Valic Company vs. Mid Cap Strategic | Valic Company vs. Valic Company I | Valic Company vs. Valic Company I |
| Franklin High vs. Ridgeworth Seix Government | Franklin High vs. Intermediate Government Bond | Franklin High vs. Us Government Plus | Franklin High vs. Aig Government Money |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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