Correlation Between Franklin Mutual and Voya Global

Can any of the company-specific risk be diversified away by investing in both Franklin Mutual 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 Mutual 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 Mutual Global and Voya Global Equity, you can compare the effects of market volatilities on Franklin Mutual 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 Mutual with a short position of Voya Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Voya Global.

Diversification Opportunities for Franklin Mutual and Voya Global

0.75

Correlation Coefficient

Franklin Mutual  Voya Global

Poor diversification

The 3 months correlation between Franklin and Voya is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Voya Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Equity and Franklin Mutual 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 Mutual Global 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 Equity has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Voya Global go up and down completely randomly.

Pair Corralation between Franklin Mutual and Voya Global

Assuming the 90 days horizon Franklin Mutual is expected to generate 4.16 times less return on investment than Voya Global. In addition to that, Franklin Mutual is 1.35 times more volatile than Voya Global Equity. It trades about 0.01 of its total potential returns per unit of risk. Voya Global Equity is currently generating about 0.07 per unit of volatility. If you would invest  3,884  in Voya Global Equity on October 24, 2024 and sell it today you would earn a total of  821.00  from holding Voya Global Equity or generate 21.14% return on investment over 90 days.

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

Franklin Mutual Global  vs.  Voya Global Equity

Franklin Mutual Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Mutual Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Voya Global Equity

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Global Equity 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 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 Mutual and Voya Global

The main advantage of trading using opposite Franklin Mutual and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual 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 Mutual Global and Voya Global Equity 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.