Correlation Between Voya Index and Western Assets
Can any of the company-specific risk be diversified away by investing in both Voya Index and Western Assets 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 Index and Western Assets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Index Solution and Western Assets Emerging, you can compare the effects of market volatilities on Voya Index and Western Assets 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 Index with a short position of Western Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Western Assets.
Diversification Opportunities for Voya Index and Western Assets
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Voya and Western is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Solution and Western Assets Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Assets Emerging and Voya Index 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 Index Solution are associated (or correlated) with Western Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Assets Emerging has no effect on the direction of Voya Index i.e., Voya Index and Western Assets go up and down completely randomly.
Pair Corralation between Voya Index and Western Assets
Assuming the 90 days horizon Voya Index Solution is expected to generate 1.75 times more return on investment than Western Assets. However, Voya Index is 1.75 times more volatile than Western Assets Emerging. It trades about 0.15 of its potential returns per unit of risk. Western Assets Emerging is currently generating about 0.08 per unit of risk. If you would invest 1,759 in Voya Index Solution on September 12, 2024 and sell it today you would earn a total of 99.00 from holding Voya Index Solution or generate 5.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Voya Index Solution vs. Western Assets Emerging
Performance |
| Timeline |
| Voya Index Solution |
| Western Assets Emerging |
Voya Index and Western Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Western Assets
The main advantage of trading using opposite Voya Index and Western Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index position performs unexpectedly, Western Assets 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 Assets will offset losses from the drop in Western Assets' long position.| Voya Index vs. Amg River Road | Voya Index vs. Ab Small Cap | Voya Index vs. Applied Finance Explorer | Voya Index vs. Lsv Small Cap |
| Western Assets vs. Cb Large Cap | Western Assets vs. American Mutual Fund | Western Assets vs. Americafirst Large Cap | Western Assets vs. Dodge Cox Stock |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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