Correlation Between Franklin Federal and Voya Us

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

By analyzing existing cross correlation between Franklin Federal Limited Term and Voya Stock Index, you can compare the effects of market volatilities on Franklin Federal and Voya Us 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 Federal with a short position of Voya Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Voya Us.

Diversification Opportunities for Franklin Federal and Voya Us

0.41

Correlation Coefficient

Franklin Federal  Voya Us

Very weak diversification

The 3 months correlation between Franklin and Voya is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and Voya Stock Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Stock Index and Franklin Federal 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 Federal Limited Term are associated (or correlated) with Voya Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Stock Index has no effect on the direction of Franklin Federal i.e., Franklin Federal and Voya Us go up and down completely randomly.

Pair Corralation between Franklin Federal and Voya Us

Assuming the 90 days horizon Franklin Federal Limited Term is expected to generate 0.09 times more return on investment than Voya Us. However, Franklin Federal Limited Term is 10.71 times less risky than Voya Us. It trades about 0.12 of its potential returns per unit of risk. Voya Stock Index is currently generating about -0.02 per unit of risk. If you would invest  1,012  in Franklin Federal Limited Term on October 8, 2024 and sell it today you would earn a total of  16.00  from holding Franklin Federal Limited Term or generate 1.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Franklin Federal Limited Term  vs.  Voya Stock Index

Franklin Federal Lim

Risk-Adjusted Performance

0 of 100

Very Weak

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

Voya Stock Index

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Stock Index are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Voya Us 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 Federal and Voya Us

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

The idea behind Franklin Federal Limited Term and Voya Stock Index 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..