Correlation Between Voya Solution and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Voya Solution and Emerging Markets 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 Solution and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Solution Conservative and Emerging Markets Equity, you can compare the effects of market volatilities on Voya Solution and Emerging Markets 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 Solution with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Solution and Emerging Markets.
Diversification Opportunities for Voya Solution and Emerging Markets
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Voya and Emerging is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Voya Solution Conservative and Emerging Markets Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Equity and Voya Solution 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 Solution Conservative are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Equity has no effect on the direction of Voya Solution i.e., Voya Solution and Emerging Markets go up and down completely randomly.
Pair Corralation between Voya Solution and Emerging Markets
Assuming the 90 days horizon Voya Solution Conservative is expected to generate 0.46 times more return on investment than Emerging Markets. However, Voya Solution Conservative is 2.18 times less risky than Emerging Markets. It trades about -0.28 of its potential returns per unit of risk. Emerging Markets Equity is currently generating about -0.25 per unit of risk. If you would invest 1,043 in Voya Solution Conservative on October 11, 2024 and sell it today you would lose (17.00) from holding Voya Solution Conservative or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Solution Conservative vs. Emerging Markets Equity
Performance |
| Timeline |
| Voya Solution Conser |
| Emerging Markets Equity |
Voya Solution and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Solution and Emerging Markets
The main advantage of trading using opposite Voya Solution and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Solution position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Voya Solution vs. Multi Manager High Yield | Voya Solution vs. Fidelity Focused High | Voya Solution vs. Msift High Yield | Voya Solution vs. Dunham High Yield |
| Emerging Markets vs. Madison Diversified Income | Emerging Markets vs. Conservative Balanced Allocation | Emerging Markets vs. Voya Solution Conservative | Emerging Markets vs. Guggenheim Diversified Income |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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