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 High and Voya Global Advantage, 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
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Voya is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Voya Global Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Advantage 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 High 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 Advantage 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 is expected to generate 7.43 times less return on investment than Voya Global. In addition to that, Western Asset is 1.28 times more volatile than Voya Global Advantage. It trades about 0.04 of its total potential returns per unit of risk. Voya Global Advantage is currently generating about 0.34 per unit of volatility. If you would invest 933.00 in Voya Global Advantage on August 28, 2024 and sell it today you would earn a total of 39.00 from holding Voya Global Advantage or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset High vs. Voya Global Advantage
Performance |
| Timeline |
| Western Asset High |
| Voya Global Advantage |
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 Global | Western Asset vs. Western Asset High | Western Asset vs. Voya Global Advantage | Western Asset vs. Voya Global Equity |
| Voya Global vs. Eaton Vance Tax | Voya Global vs. Eaton Vance Risk | Voya Global vs. Blackrock Muniholdings Closed | Voya Global vs. DTF Tax Free |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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