Correlation Between Western Asset and Voya Global
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Voya Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Global and Voya Global Equity, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Voya Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Voya Global.
Diversification Opportunities for Western Asset and Voya Global
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Western and Voya is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global 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 Western Asset 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 Western Asset Global 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 Western Asset i.e., Western Asset and Voya Global go up and down completely randomly.
Pair Corralation between Western Asset and Voya Global
Considering the 90-day investment horizon Western Asset Global is expected to under-perform the Voya Global. But the etf apears to be less risky and, when comparing its historical volatility, Western Asset Global is 1.19 times less risky than Voya Global. The etf trades about -0.13 of its potential returns per unit of risk. The Voya Global Equity is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 538.00 in Voya Global Equity on August 28, 2024 and sell it today you would earn a total of 24.00 from holding Voya Global Equity or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Global vs. Voya Global Equity
Performance |
| Timeline |
| Western Asset Global |
| Voya Global Equity |
Western Asset and Voya Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Voya Global
The main advantage of trading using opposite Western Asset and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Doubleline Opportunistic Credit |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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