Correlation Between Voya Us and Voya International
Can any of the company-specific risk be diversified away by investing in both Voya Us 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 Us 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 Us 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 Us with a short position of Voya International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Us and Voya International.
Diversification Opportunities for Voya Us and Voya International
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and Voya is 0.81. 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 Us 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 Us i.e., Voya Us and Voya International go up and down completely randomly.
Pair Corralation between Voya Us and Voya International
Assuming the 90 days horizon Voya Us is expected to generate 17.44 times less return on investment than Voya International. But when comparing it to its historical volatility, Voya Bond Index is 2.04 times less risky than Voya International. It trades about 0.02 of its potential returns per unit of risk. Voya International Index is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,098 in Voya International Index on October 20, 2024 and sell it today you would earn a total of 22.00 from holding Voya International Index or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Voya Bond Index vs. Voya International Index
Performance |
| Timeline |
| Voya Bond Index |
| Voya International Index |
Voya Us and Voya International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Us and Voya International
The main advantage of trading using opposite Voya Us and Voya International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Us 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 Us vs. Columbia Real Estate | Voya Us vs. Rreef Property Trust | Voya Us vs. Pender Real Estate | Voya Us vs. Fidelity Real Estate |
| Voya International vs. Voya Bond Index | Voya International vs. Voya Bond Index | Voya International vs. Voya Limited Maturity | Voya International 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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