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 Municipal, 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
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Voya and Western is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Voya Emerging Markets and Western Asset Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Municipal 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 Municipal 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 is expected to generate 3.14 times less return on investment than Western Asset. In addition to that, Voya Emerging is 1.95 times more volatile than Western Asset Municipal. It trades about 0.03 of its total potential returns per unit of risk. Western Asset Municipal is currently generating about 0.17 per unit of volatility. If you would invest 645.00 in Western Asset Municipal on August 31, 2024 and sell it today you would earn a total of 77.00 from holding Western Asset Municipal or generate 11.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Emerging Markets vs. Western Asset Municipal
Performance |
| Timeline |
| Voya Emerging Markets |
| Western Asset Municipal |
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 Managed | Western Asset vs. Blackrock Muniholdings Quality | Western Asset vs. DTF Tax Free | Western Asset vs. John Hancock 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 Valuation module to check real value of public entities based on technical and fundamental data.
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