Correlation Between Voya Limited and Franklin Vertible

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

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

Diversification Opportunities for Voya Limited and Franklin Vertible

0.2

Correlation Coefficient

Voya Limited  Franklin Vertible

Modest diversification

The 3 months correlation between Voya and Franklin is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Voya Limited Maturity and Franklin Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Vertible and Voya Limited 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 Limited Maturity are associated (or correlated) with Franklin Vertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Vertible has no effect on the direction of Voya Limited i.e., Voya Limited and Franklin Vertible go up and down completely randomly.

Pair Corralation between Voya Limited and Franklin Vertible

Assuming the 90 days horizon Voya Limited is expected to generate 3.74 times less return on investment than Franklin Vertible. But when comparing it to its historical volatility, Voya Limited Maturity is 4.85 times less risky than Franklin Vertible. It trades about 0.11 of its potential returns per unit of risk. Franklin Vertible Securities is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,305  in Franklin Vertible Securities on October 25, 2024 and sell it today you would earn a total of  73.00  from holding Franklin Vertible Securities or generate 3.17% return on investment over 90 days.

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

Voya Limited Maturity  vs.  Franklin Vertible Securities

Voya Limited Maturity

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Limited Maturity are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Voya Limited is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Franklin Vertible

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Vertible Securities are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Franklin Vertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Voya Limited and Franklin Vertible

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

The idea behind Voya Limited Maturity and Franklin Vertible Securities 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.