Correlation Between Franklin Equity and Voya Global

Can any of the company-specific risk be diversified away by investing in both Franklin Equity and Voya Global 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 Franklin Equity and Voya Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Franklin Equity Income and Voya Global Bond, you can compare the effects of market volatilities on Franklin Equity and Voya Global 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 Franklin Equity with a short position of Voya Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Equity and Voya Global.

Diversification Opportunities for Franklin Equity and Voya Global

0.0

Correlation Coefficient

Franklin Equity  Voya Global

Pay attention - limited upside

The 3 months correlation between Franklin and Voya is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Equity Income and Voya Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Bond and Franklin Equity 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 Franklin Equity Income are associated (or correlated) with Voya Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Global Bond has no effect on the direction of Franklin Equity i.e., Franklin Equity and Voya Global go up and down completely randomly.

Pair Corralation between Franklin Equity and Voya Global

Assuming the 90 days horizon Franklin Equity is expected to generate 91.8 times less return on investment than Voya Global. In addition to that, Franklin Equity is 2.52 times more volatile than Voya Global Bond. It trades about 0.0 of its total potential returns per unit of risk. Voya Global Bond is currently generating about 0.14 per unit of volatility. If you would invest  774.00  in Voya Global Bond on December 21, 2024 and sell it today you would earn a total of  21.00  from holding Voya Global Bond or generate 2.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Franklin Equity Income  vs.  Voya Global Bond

Franklin Equity Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Franklin Equity Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Franklin Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Global Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Global Bond are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Voya Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Franklin Equity and Voya Global

The main advantage of trading using opposite Franklin Equity and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Equity position performs unexpectedly, Voya Global 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 Voya Global will offset losses from the drop in Voya Global's long position.

The idea behind Franklin Equity Income and Voya Global Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.