Correlation Between Vy(r) Franklin and Active International

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

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

Diversification Opportunities for Vy(r) Franklin and Active International

0.94

Correlation Coefficient

Vy(r) Franklin  Active International

Almost no diversification

The 3 months correlation between Vy(r) and Active is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Vy Franklin Income and Active International Allocatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Active International and Vy(r) Franklin 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 Franklin Income are associated (or correlated) with Active International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Active International has no effect on the direction of Vy(r) Franklin i.e., Vy(r) Franklin and Active International go up and down completely randomly.

Pair Corralation between Vy(r) Franklin and Active International

Assuming the 90 days horizon Vy(r) Franklin is expected to generate 1.52 times less return on investment than Active International. But when comparing it to its historical volatility, Vy Franklin Income is 1.84 times less risky than Active International. It trades about 0.34 of its potential returns per unit of risk. Active International Allocation is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  1,754  in Active International Allocation on April 24, 2025 and sell it today you would earn a total of  179.00  from holding Active International Allocation or generate 10.21% return on investment over 90 days.

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

Vy Franklin Income  vs.  Active International Allocatio

Vy Franklin Income

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Vy Franklin Income are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vy(r) Franklin may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Active International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Active International Allocation are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Active International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Vy(r) Franklin and Active International

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

The idea behind Vy Franklin Income and Active International Allocation 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.