Correlation Between Voya Bond and Voya Global
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Voya Global 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 Global 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 Global Bond, you can compare the effects of market volatilities on Voya Bond and Voya Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Voya Global.
Diversification Opportunities for Voya Bond and Voya Global
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Voya and Voya is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Voya Bond Index and Voya Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Bond 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Global Bond has no effect on the direction of Voya Bond i.e., Voya Bond and Voya Global go up and down completely randomly.
Pair Corralation between Voya Bond and Voya Global
Assuming the 90 days horizon Voya Bond Index is expected to generate 0.74 times more return on investment than Voya Global. However, Voya Bond Index is 1.36 times less risky than Voya Global. It trades about -0.09 of its potential returns per unit of risk. Voya Global Bond is currently generating about -0.18 per unit of risk. If you would invest 905.00 in Voya Bond Index on August 25, 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 | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Voya Bond Index vs. Voya Global Bond
Performance |
| Timeline |
| Voya Bond Index |
| Voya Global Bond |
Voya Bond and Voya Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Bond and Voya Global
The main advantage of trading using opposite Voya Bond and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Voya Global 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 Global will offset losses from the drop in Voya Global's long position.| Voya Bond vs. Voya Bond Index | Voya Bond vs. Voya Limited Maturity | Voya Bond vs. Voya Limited Maturity | Voya Bond vs. Voya Bond Index |
| Voya Global vs. Voya Bond Index | Voya Global vs. Voya Bond Index | Voya Global vs. Voya Limited Maturity | Voya Global vs. Voya Limited Maturity |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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