Correlation Between Voya Global and First Trust
Can any of the company-specific risk be diversified away by investing in both Voya Global and First Trust 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 First Trust 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 First Trust NASDAQ, you can compare the effects of market volatilities on Voya Global and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Global and First Trust.
Diversification Opportunities for Voya Global and First Trust
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Voya and First is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Voya Global Advantage and First Trust NASDAQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust NASDAQ 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust NASDAQ has no effect on the direction of Voya Global i.e., Voya Global and First Trust go up and down completely randomly.
Pair Corralation between Voya Global and First Trust
Considering the 90-day investment horizon Voya Global Advantage is expected to generate 0.33 times more return on investment than First Trust. However, Voya Global Advantage is 3.01 times less risky than First Trust. It trades about 0.08 of its potential returns per unit of risk. First Trust NASDAQ is currently generating about -0.03 per unit of risk. If you would invest 727.00 in Voya Global Advantage on August 27, 2024 and sell it today you would earn a total of 237.00 from holding Voya Global Advantage or generate 32.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Global Advantage vs. First Trust NASDAQ
Performance |
| Timeline |
| Voya Global Advantage |
| First Trust NASDAQ |
Voya Global and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Global and First Trust
The main advantage of trading using opposite Voya Global and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Global position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Voya Global vs. Eaton Vance Tax | Voya Global vs. Eaton Vance Risk | Voya Global vs. Blackrock Muniholdings Closed | Voya Global vs. DTF Tax Free |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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