Correlation Between Franklin Government and Victory Special
Can any of the company-specific risk be diversified away by investing in both Franklin Government and Victory Special 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 Government and Victory Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Government Money and Victory Special Value, you can compare the effects of market volatilities on Franklin Government and Victory Special 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 Government with a short position of Victory Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Victory Special.
Diversification Opportunities for Franklin Government and Victory Special
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Victory is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Victory Special Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Special Value and Franklin Government 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 Government Money are associated (or correlated) with Victory Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Special Value has no effect on the direction of Franklin Government i.e., Franklin Government and Victory Special go up and down completely randomly.
Pair Corralation between Franklin Government and Victory Special
Assuming the 90 days horizon Franklin Government is expected to generate 9.26 times less return on investment than Victory Special. But when comparing it to its historical volatility, Franklin Government Money is 6.25 times less risky than Victory Special. It trades about 0.13 of its potential returns per unit of risk. Victory Special Value is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,419 in Victory Special Value on September 13, 2024 and sell it today you would earn a total of 327.00 from holding Victory Special Value or generate 9.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Government Money vs. Victory Special Value
Performance |
Timeline |
Franklin Government Money |
Victory Special Value |
Franklin Government and Victory Special Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Government and Victory Special
The main advantage of trading using opposite Franklin Government and Victory Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government position performs unexpectedly, Victory Special 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 Victory Special will offset losses from the drop in Victory Special's long position.Franklin Government vs. Jpmorgan High Yield | Franklin Government vs. Janus High Yield Fund | Franklin Government vs. Gmo High Yield | Franklin Government vs. Guggenheim High Yield |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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