Correlation Between Us Government and Voya Global
Can any of the company-specific risk be diversified away by investing in both Us Government 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 Us Government and Voya Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Securities and Voya Global Bond, you can compare the effects of market volatilities on Us Government 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 Us Government with a short position of Voya Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Voya Global.
Diversification Opportunities for Us Government and Voya Global
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UGSDX and Voya is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities and Voya Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Bond and Us Government 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 Us Government Securities 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 Bond has no effect on the direction of Us Government i.e., Us Government and Voya Global go up and down completely randomly.
Pair Corralation between Us Government and Voya Global
Assuming the 90 days horizon Us Government is expected to generate 1.4 times less return on investment than Voya Global. But when comparing it to its historical volatility, Us Government Securities is 2.76 times less risky than Voya Global. It trades about 0.22 of its potential returns per unit of risk. Voya Global Bond is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 806.00 in Voya Global Bond on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Voya Global Bond or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Us Government Securities vs. Voya Global Bond
Performance |
| Timeline |
| Us Government Securities |
| Voya Global Bond |
Us Government and Voya Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Voya Global
The main advantage of trading using opposite Us Government and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government 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.| Us Government vs. Quantitative Longshort Equity | Us Government vs. Kentucky Tax Free Short To Medium | Us Government vs. Blackrock Short Term Inflat Protected | Us Government vs. Alpine Ultra Short |
| Voya Global vs. Voya Bond Index | Voya Global vs. Voya Bond Index | Voya Global vs. Voya Limited Maturity | Voya Global 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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