Correlation Between Voya High and Western Asset
Can any of the company-specific risk be diversified away by investing in both Voya High 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 High 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 High Yield and Western Asset High, you can compare the effects of market volatilities on Voya High 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 High with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Western Asset.
Diversification Opportunities for Voya High and Western Asset
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Voya and Western is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and Voya High 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 High Yield 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 High has no effect on the direction of Voya High i.e., Voya High and Western Asset go up and down completely randomly.
Pair Corralation between Voya High and Western Asset
Assuming the 90 days horizon Voya High is expected to generate 1.49 times less return on investment than Western Asset. But when comparing it to its historical volatility, Voya High Yield is 1.1 times less risky than Western Asset. It trades about 0.15 of its potential returns per unit of risk. Western Asset High is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 693.00 in Western Asset High on September 2, 2024 and sell it today you would earn a total of 15.00 from holding Western Asset High or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya High Yield vs. Western Asset High
Performance |
| Timeline |
| Voya High Yield |
| Western Asset High |
Voya High and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Western Asset
The main advantage of trading using opposite Voya High and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High 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 High vs. Ab Impact Municipal | Voya High vs. Transamerica Funds | Voya High vs. Old Westbury Municipal | Voya High vs. Federated Ohio Municipal |
| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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