Correlation Between Voya Bond and Voya International
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Voya International 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 Bond and Voya International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Bond Index and Voya International Index, you can compare the effects of market volatilities on Voya Bond and Voya International 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 Bond with a short position of Voya International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Voya International.
Diversification Opportunities for Voya Bond and Voya International
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Voya is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Voya Bond Index and Voya International Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya International Index and Voya Bond 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 Bond Index are associated (or correlated) with Voya International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya International Index has no effect on the direction of Voya Bond i.e., Voya Bond and Voya International go up and down completely randomly.
Pair Corralation between Voya Bond and Voya International
Assuming the 90 days horizon Voya Bond Index is expected to generate 0.38 times more return on investment than Voya International. However, Voya Bond Index is 2.63 times less risky than Voya International. It trades about -0.09 of its potential returns per unit of risk. Voya International Index is currently generating about -0.18 per unit of risk. If you would invest 904.00 in Voya Bond Index on August 24, 2024 and sell it today you would lose (6.00) from holding Voya Bond Index or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Voya Bond Index vs. Voya International Index
Performance |
| Timeline |
| Voya Bond Index |
| Voya International Index |
Voya Bond and Voya International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Bond and Voya International
The main advantage of trading using opposite Voya Bond and Voya International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Voya International 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 Voya International will offset losses from the drop in Voya International's long position.| Voya Bond vs. Rbc Bluebay Emerging | Voya Bond vs. Angel Oak Multi Strategy | Voya Bond vs. Shelton Emerging Markets | Voya Bond vs. Artisan Emerging Markets |
| Voya International vs. Nuveen Global Real | Voya International vs. Kinetics Global Fund | Voya International vs. Ms Global Fixed | Voya International vs. Commonwealth Global Fund |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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