Correlation Between Multi Manager and Voya Global
Can any of the company-specific risk be diversified away by investing in both Multi Manager 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 Multi Manager and Voya Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Manager High Yield and Voya Global Equity, you can compare the effects of market volatilities on Multi Manager 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 Multi Manager with a short position of Voya Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Manager and Voya Global.
Diversification Opportunities for Multi Manager and Voya Global
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and Voya is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager High Yield and Voya Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Equity and Multi Manager 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 Multi Manager High Yield 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 Equity has no effect on the direction of Multi Manager i.e., Multi Manager and Voya Global go up and down completely randomly.
Pair Corralation between Multi Manager and Voya Global
Assuming the 90 days horizon Multi Manager is expected to generate 2.24 times less return on investment than Voya Global. But when comparing it to its historical volatility, Multi Manager High Yield is 3.92 times less risky than Voya Global. It trades about 0.21 of its potential returns per unit of risk. Voya Global Equity is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,331 in Voya Global Equity on September 3, 2024 and sell it today you would earn a total of 535.00 from holding Voya Global Equity or generate 12.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Manager High Yield vs. Voya Global Equity
Performance |
| Timeline |
| Multi Manager High |
| Voya Global Equity |
Multi Manager and Voya Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Manager and Voya Global
The main advantage of trading using opposite Multi Manager and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Manager 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.| Multi Manager vs. Intermediate Term Tax Free Bond | Multi Manager vs. Federated Pennsylvania Municipal | Multi Manager vs. Ishares Municipal Bond | Multi Manager vs. Morningstar Municipal Bond |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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