Correlation Between Vy Goldman and Franklin Income

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

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

Diversification Opportunities for Vy Goldman and Franklin Income

0.02

Correlation Coefficient

Vy Goldman  Franklin Income

Significant diversification

The 3 months correlation between VGSBX and Franklin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Vy Goldman Sachs and Franklin Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Income and Vy Goldman 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 Vy Goldman Sachs are associated (or correlated) with Franklin Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Income has no effect on the direction of Vy Goldman i.e., Vy Goldman and Franklin Income go up and down completely randomly.

Pair Corralation between Vy Goldman and Franklin Income

Assuming the 90 days horizon Vy Goldman is expected to generate 1.44 times less return on investment than Franklin Income. In addition to that, Vy Goldman is 1.51 times more volatile than Franklin Income Fund. It trades about 0.05 of its total potential returns per unit of risk. Franklin Income Fund is currently generating about 0.11 per unit of volatility. If you would invest  209.00  in Franklin Income Fund on September 12, 2024 and sell it today you would earn a total of  32.00  from holding Franklin Income Fund or generate 15.31% return on investment over 90 days.

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

Vy Goldman Sachs  vs.  Franklin Income Fund

Vy Goldman Sachs

Risk-Adjusted Performance

0 of 100

Very Weak

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

Franklin Income

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Income Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Franklin Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vy Goldman and Franklin Income

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

The idea behind Vy Goldman Sachs and Franklin Income Fund 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..