Correlation Between American Balanced and Voya Asia
Can any of the company-specific risk be diversified away by investing in both American Balanced and Voya Asia 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 American Balanced and Voya Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced and Voya Asia Pacific, you can compare the effects of market volatilities on American Balanced and Voya Asia 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 American Balanced with a short position of Voya Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Voya Asia.
Diversification Opportunities for American Balanced and Voya Asia
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Voya is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced and Voya Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Asia Pacific and American Balanced 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 American Balanced are associated (or correlated) with Voya Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Asia Pacific has no effect on the direction of American Balanced i.e., American Balanced and Voya Asia go up and down completely randomly.
Pair Corralation between American Balanced and Voya Asia
Assuming the 90 days horizon American Balanced is expected to generate 1.56 times less return on investment than Voya Asia. But when comparing it to its historical volatility, American Balanced is 1.45 times less risky than Voya Asia. It trades about 0.07 of its potential returns per unit of risk. Voya Asia Pacific is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 570.00 in Voya Asia Pacific on November 3, 2024 and sell it today you would earn a total of 48.00 from holding Voya Asia Pacific or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Balanced vs. Voya Asia Pacific
Performance |
| Timeline |
| American Balanced |
| Voya Asia Pacific |
American Balanced and Voya Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Voya Asia
The main advantage of trading using opposite American Balanced and Voya Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, Voya Asia 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 Asia will offset losses from the drop in Voya Asia's long position.| American Balanced vs. Income Fund Of | American Balanced vs. Capital Income Builder | American Balanced vs. Capital World Growth | American Balanced vs. Growth Fund Of |
| Voya Asia vs. The Gabelli Multimedia | Voya Asia vs. The Gabelli Equity | Voya Asia vs. Virtus AllianzGI Convertible | Voya Asia vs. The Gabelli Equity |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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