Correlation Between First Trust and Voya Global
Can any of the company-specific risk be diversified away by investing in both First Trust and Voya Global 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 First Trust and Voya Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Senior and Voya Global Equity, you can compare the effects of market volatilities on First Trust and Voya Global 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 First Trust with a short position of Voya Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Voya Global.
Diversification Opportunities for First Trust and Voya Global
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and Voya is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Senior and Voya Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Equity and First Trust 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 First Trust Senior are associated (or correlated) with Voya Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Global Equity has no effect on the direction of First Trust i.e., First Trust and Voya Global go up and down completely randomly.
Pair Corralation between First Trust and Voya Global
Considering the 90-day investment horizon First Trust Senior is expected to generate 0.66 times more return on investment than Voya Global. However, First Trust Senior is 1.52 times less risky than Voya Global. It trades about 0.16 of its potential returns per unit of risk. Voya Global Equity is currently generating about 0.07 per unit of risk. If you would invest 1,008 in First Trust Senior on August 28, 2024 and sell it today you would earn a total of 36.00 from holding First Trust Senior or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Senior vs. Voya Global Equity
Performance |
| Timeline |
| First Trust Senior |
| Voya Global Equity |
First Trust and Voya Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Voya Global
The main advantage of trading using opposite First Trust and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Voya Global 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 Global will offset losses from the drop in Voya Global's long position.| First Trust vs. Blackstone Gso Long | First Trust vs. Eaton Vance Senior | First Trust vs. Western Asset Global | First Trust vs. Western Asset Global |
| Voya Global vs. Eaton Vance Risk | Voya Global vs. Blackrock Muniholdings Closed | Voya Global vs. DTF Tax Free | Voya Global vs. Eaton Vance Floating |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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