Correlation Between Voya Index and Shelton Emerging
Can any of the company-specific risk be diversified away by investing in both Voya Index and Shelton Emerging 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 Index and Shelton Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Index Plus and Shelton Emerging Markets, you can compare the effects of market volatilities on Voya Index and Shelton Emerging 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 Index with a short position of Shelton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Shelton Emerging.
Diversification Opportunities for Voya Index and Shelton Emerging
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Voya and Shelton is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Plus and Shelton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Emerging Markets and Voya Index 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 Index Plus are associated (or correlated) with Shelton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Emerging Markets has no effect on the direction of Voya Index i.e., Voya Index and Shelton Emerging go up and down completely randomly.
Pair Corralation between Voya Index and Shelton Emerging
Assuming the 90 days horizon Voya Index Plus is expected to generate 1.4 times more return on investment than Shelton Emerging. However, Voya Index is 1.4 times more volatile than Shelton Emerging Markets. It trades about 0.06 of its potential returns per unit of risk. Shelton Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 2,016 in Voya Index Plus on September 12, 2024 and sell it today you would earn a total of 378.00 from holding Voya Index Plus or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Index Plus vs. Shelton Emerging Markets
Performance |
| Timeline |
| Voya Index Plus |
| Shelton Emerging Markets |
Voya Index and Shelton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Shelton Emerging
The main advantage of trading using opposite Voya Index and Shelton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index position performs unexpectedly, Shelton Emerging 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 Shelton Emerging will offset losses from the drop in Shelton Emerging's long position.| Voya Index vs. Shelton Emerging Markets | Voya Index vs. Origin Emerging Markets | Voya Index vs. Calvert Developed Market | Voya Index vs. Ashmore Emerging Markets |
| Shelton Emerging vs. American Funds New | Shelton Emerging vs. SCOR PK | Shelton Emerging vs. Morningstar Unconstrained Allocation | Shelton Emerging vs. Via Renewables |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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