Correlation Between Vanguard Health and Franklin Small
Can any of the company-specific risk be diversified away by investing in both Vanguard Health and Franklin Small 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 Vanguard Health and Franklin Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Health Care and Franklin Small Cap, you can compare the effects of market volatilities on Vanguard Health and Franklin Small 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 Vanguard Health with a short position of Franklin Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Health and Franklin Small.
Diversification Opportunities for Vanguard Health and Franklin Small
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and Franklin is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care and Franklin Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Small Cap and Vanguard Health 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 Vanguard Health Care are associated (or correlated) with Franklin Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Small Cap has no effect on the direction of Vanguard Health i.e., Vanguard Health and Franklin Small go up and down completely randomly.
Pair Corralation between Vanguard Health and Franklin Small
Assuming the 90 days horizon Vanguard Health Care is expected to generate 0.79 times more return on investment than Franklin Small. However, Vanguard Health Care is 1.26 times less risky than Franklin Small. It trades about 0.23 of its potential returns per unit of risk. Franklin Small Cap is currently generating about 0.11 per unit of risk. If you would invest 7,695 in Vanguard Health Care on September 6, 2025 and sell it today you would earn a total of 1,105 from holding Vanguard Health Care or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Health Care vs. Franklin Small Cap
Performance |
| Timeline |
| Vanguard Health Care |
| Franklin Small Cap |
Vanguard Health and Franklin Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Health and Franklin Small
The main advantage of trading using opposite Vanguard Health and Franklin Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Health position performs unexpectedly, Franklin Small 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 Small will offset losses from the drop in Franklin Small's long position.| Vanguard Health vs. T Rowe Price | Vanguard Health vs. Balanced Fund Retail | Vanguard Health vs. Sterling Capital Behavioral | Vanguard Health vs. Ultra Short Fixed Income |
| Franklin Small vs. Putnam Equity Income | Franklin Small vs. Franklin Mutual Beacon | Franklin Small vs. Templeton Developing Markets | Franklin Small 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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