Correlation Between Voya Emerging and Western Asset
Can any of the company-specific risk be diversified away by investing in both Voya Emerging 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 Emerging 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 Emerging Markets and Western Asset Global, you can compare the effects of market volatilities on Voya Emerging 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 Emerging with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Emerging and Western Asset.
Diversification Opportunities for Voya Emerging and Western Asset
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Voya and Western is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Voya Emerging Markets and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global and Voya Emerging 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 Emerging Markets 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 Global has no effect on the direction of Voya Emerging i.e., Voya Emerging and Western Asset go up and down completely randomly.
Pair Corralation between Voya Emerging and Western Asset
Considering the 90-day investment horizon Voya Emerging Markets is expected to under-perform the Western Asset. In addition to that, Voya Emerging is 1.38 times more volatile than Western Asset Global. It trades about -0.22 of its total potential returns per unit of risk. Western Asset Global is currently generating about -0.03 per unit of volatility. If you would invest 674.00 in Western Asset Global on August 28, 2024 and sell it today you would lose (3.00) from holding Western Asset Global or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Emerging Markets vs. Western Asset Global
Performance |
| Timeline |
| Voya Emerging Markets |
| Western Asset Global |
Voya Emerging and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Emerging and Western Asset
The main advantage of trading using opposite Voya Emerging and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Emerging 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 Emerging vs. Nuveen Real Asset | Voya Emerging vs. Nuveen Mortgage Opportunity | Voya Emerging vs. Pgim Global High | Voya Emerging vs. Nuveen Core Equity |
| Western Asset vs. Western Asset High | Western Asset vs. BNY Mellon High | Western Asset vs. Allspring Income Opportunities | Western Asset vs. Allianzgi Convertible Income |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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