Correlation Between Ab Value and Voya Global

Can any of the company-specific risk be diversified away by investing in both Ab Value 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 Ab Value and Voya Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Value Fund and Voya Global Bond, you can compare the effects of market volatilities on Ab Value 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 Ab Value with a short position of Voya Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Voya Global.

Diversification Opportunities for Ab Value and Voya Global

0.06

Correlation Coefficient

Ab Value  Voya Global

Significant diversification

The 3 months correlation between ABVCX and Voya is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund 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 Ab Value 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 Ab Value Fund 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 Ab Value i.e., Ab Value and Voya Global go up and down completely randomly.

Pair Corralation between Ab Value and Voya Global

Assuming the 90 days horizon Ab Value is expected to generate 1.21 times less return on investment than Voya Global. In addition to that, Ab Value is 2.6 times more volatile than Voya Global Bond. It trades about 0.03 of its total potential returns per unit of risk. Voya Global Bond is currently generating about 0.1 per unit of volatility. If you would invest  788.00  in Voya Global Bond on December 29, 2024 and sell it today you would earn a total of  15.00  from holding Voya Global Bond or generate 1.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ab Value Fund  vs.  Voya Global Bond

Ab Value Fund

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Value Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Ab Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Global Bond

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Global Bond are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Voya Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Value and Voya Global

The main advantage of trading using opposite Ab Value and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Value 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.

The idea behind Ab Value Fund and Voya Global Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.