Correlation Between Western Asset and Voya Global
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Voya Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and Voya Global Perspectives, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Voya Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Voya Global.
Diversification Opportunities for Western Asset and Voya Global
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Voya is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Voya Global Perspectives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Perspectives and Western Asset 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 Asset Diversified 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 Perspectives has no effect on the direction of Western Asset i.e., Western Asset and Voya Global go up and down completely randomly.
Pair Corralation between Western Asset and Voya Global
Assuming the 90 days horizon Western Asset is expected to generate 4.36 times less return on investment than Voya Global. But when comparing it to its historical volatility, Western Asset Diversified is 1.45 times less risky than Voya Global. It trades about 0.03 of its potential returns per unit of risk. Voya Global Perspectives is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 741.00 in Voya Global Perspectives on September 13, 2024 and sell it today you would earn a total of 166.00 from holding Voya Global Perspectives or generate 22.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Voya Global Perspectives
Performance |
| Timeline |
| Western Asset Diversified |
| Voya Global Perspectives |
Western Asset and Voya Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Voya Global
The main advantage of trading using opposite Western Asset and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
| Voya Global vs. Wasatch Small Cap | Voya Global vs. Western Asset Diversified | Voya Global vs. Fidelity Advisor Diversified | Voya Global vs. Oaktree Diversifiedome |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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