Correlation Between Western Assets and Voya Index
Can any of the company-specific risk be diversified away by investing in both Western Assets and Voya Index 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 Western Assets and Voya Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Assets Emerging and Voya Index Solution, you can compare the effects of market volatilities on Western Assets and Voya Index 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 Western Assets with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Assets and Voya Index.
Diversification Opportunities for Western Assets and Voya Index
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Western and Voya is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Western Assets Emerging and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution and Western Assets 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 Western Assets Emerging are associated (or correlated) with Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Western Assets i.e., Western Assets and Voya Index go up and down completely randomly.
Pair Corralation between Western Assets and Voya Index
Assuming the 90 days horizon Western Assets Emerging is expected to generate 0.68 times more return on investment than Voya Index. However, Western Assets Emerging is 1.48 times less risky than Voya Index. It trades about 0.11 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.03 per unit of risk. If you would invest 1,083 in Western Assets Emerging on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Western Assets Emerging or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Assets Emerging vs. Voya Index Solution
Performance |
| Timeline |
| Western Assets Emerging |
| Voya Index Solution |
Western Assets and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Assets and Voya Index
The main advantage of trading using opposite Western Assets and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Assets position performs unexpectedly, Voya Index 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 Index will offset losses from the drop in Voya Index's long position.| Western Assets vs. Cb Large Cap | Western Assets vs. American Mutual Fund | Western Assets vs. Americafirst Large Cap | Western Assets vs. Dodge Cox Stock |
| Voya Index vs. Voya Investors Trust | Voya Index vs. Voya Vacs Index | Voya Index vs. Voya Vacs Index | Voya Index vs. Voya Vacs Index |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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