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 Equity and First Trust Dynamic, 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
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Voya and First is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Voya Global Equity and First Trust Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Dynamic 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 Equity 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 Dynamic 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
If you would invest 493.00 in Voya Global Equity on August 30, 2024 and sell it today you would earn a total of 69.00 from holding Voya Global Equity or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Voya Global Equity vs. First Trust Dynamic
Performance |
| Timeline |
| Voya Global Equity |
| First Trust Dynamic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
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 Risk | Voya Global vs. Blackrock Muniholdings Closed | Voya Global vs. DTF Tax Free | Voya Global vs. Eaton Vance Floating |
| First Trust vs. New Germany Closed | First Trust vs. Eagle Point Income | First Trust vs. Western Asset High | First Trust vs. Nuveen New York |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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