Correlation Between Voya International and Voya Large
Can any of the company-specific risk be diversified away by investing in both Voya International and Voya Large 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 International and Voya Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya International Index and Voya Large Cap, you can compare the effects of market volatilities on Voya International and Voya Large 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 International with a short position of Voya Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya International and Voya Large.
Diversification Opportunities for Voya International and Voya Large
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Voya and Voya is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Voya International Index and Voya Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap and Voya International 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 International Index are associated (or correlated) with Voya Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Voya International i.e., Voya International and Voya Large go up and down completely randomly.
Pair Corralation between Voya International and Voya Large
Assuming the 90 days horizon Voya International Index is expected to generate 0.67 times more return on investment than Voya Large. However, Voya International Index is 1.49 times less risky than Voya Large. It trades about 0.11 of its potential returns per unit of risk. Voya Large Cap is currently generating about -0.17 per unit of risk. If you would invest 1,167 in Voya International Index on December 1, 2024 and sell it today you would earn a total of 20.00 from holding Voya International Index or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Voya International Index vs. Voya Large Cap
Performance |
| Timeline |
| Voya International Index |
| Voya Large Cap |
Voya International and Voya Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya International and Voya Large
The main advantage of trading using opposite Voya International and Voya Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya International position performs unexpectedly, Voya Large 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 Large will offset losses from the drop in Voya Large's long position.| Voya International vs. Federated Government Income | Voya International vs. Dodge International Stock | Voya International vs. Pro Blend Servative Term | Voya International vs. Qs International Equity |
| Voya Large vs. Calvert Developed Market | Voya Large vs. Franklin Federal Limited Term | Voya Large vs. Ashmore Emerging Markets | Voya Large vs. Doubleline Emerging Markets |
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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