Correlation Between Voya Global and Western Asset
Can any of the company-specific risk be diversified away by investing in both Voya Global and Western Asset 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 Voya Global and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Global Advantage and Western Asset Mortgage, you can compare the effects of market volatilities on Voya Global and Western Asset 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 Voya Global with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Global and Western Asset.
Diversification Opportunities for Voya Global and Western Asset
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Voya and Western is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Voya Global Advantage and Western Asset Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Mortgage and Voya Global 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 Voya Global Advantage are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Mortgage has no effect on the direction of Voya Global i.e., Voya Global and Western Asset go up and down completely randomly.
Pair Corralation between Voya Global and Western Asset
Considering the 90-day investment horizon Voya Global Advantage is expected to generate 1.32 times more return on investment than Western Asset. However, Voya Global is 1.32 times more volatile than Western Asset Mortgage. It trades about 0.33 of its potential returns per unit of risk. Western Asset Mortgage is currently generating about 0.32 per unit of risk. If you would invest 940.00 in Voya Global Advantage on November 28, 2024 and sell it today you would earn a total of 33.00 from holding Voya Global Advantage or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Global Advantage vs. Western Asset Mortgage
Performance |
| Timeline |
| Voya Global Advantage |
| Western Asset Mortgage |
Voya Global and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Global and Western Asset
The main advantage of trading using opposite Voya Global and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Global position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Voya Global vs. Western Asset High | Voya Global vs. Western Asset Global | Voya Global vs. Western Asset High | Voya Global vs. Voya Global Equity |
| Western Asset vs. Western Asset High | Western Asset vs. Pioneer Municipal High | Western Asset vs. Doubleline Income Solutions | Western Asset vs. Doubleline Yield Opportunities |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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