Correlation Between Voya Solution and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Voya Solution and Franklin Lifesmart 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 Solution and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Solution Aggressive and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Voya Solution and Franklin Lifesmart 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 Solution with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Solution and Franklin Lifesmart.
Diversification Opportunities for Voya Solution and Franklin Lifesmart
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Voya and Franklin is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Voya Solution Aggressive and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Voya Solution 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 Solution Aggressive are associated (or correlated) with Franklin Lifesmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Lifesmart has no effect on the direction of Voya Solution i.e., Voya Solution and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Voya Solution and Franklin Lifesmart
Assuming the 90 days horizon Voya Solution Aggressive is expected to generate 2.19 times more return on investment than Franklin Lifesmart. However, Voya Solution is 2.19 times more volatile than Franklin Lifesmart Retirement. It trades about 0.06 of its potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about -0.04 per unit of risk. If you would invest 1,493 in Voya Solution Aggressive on September 26, 2024 and sell it today you would earn a total of 36.00 from holding Voya Solution Aggressive or generate 2.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Voya Solution Aggressive vs. Franklin Lifesmart Retirement
Performance |
Timeline |
Voya Solution Aggressive |
Franklin Lifesmart |
Voya Solution and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Voya Solution and Franklin Lifesmart
The main advantage of trading using opposite Voya Solution and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Solution position performs unexpectedly, Franklin Lifesmart 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 Lifesmart will offset losses from the drop in Franklin Lifesmart's long position.Voya Solution vs. Franklin Lifesmart Retirement | Voya Solution vs. Wilmington Trust Retirement | Voya Solution vs. College Retirement Equities | Voya Solution vs. Strategic Allocation Moderate |
Franklin Lifesmart vs. Franklin Mutual Beacon | Franklin Lifesmart vs. Templeton Developing Markets | Franklin Lifesmart vs. Franklin Mutual Global | Franklin Lifesmart vs. Franklin Mutual Global |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |