Correlation Between Auer Growth and Voya International

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

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

Diversification Opportunities for Auer Growth and Voya International

-0.46

Correlation Coefficient

Auer Growth  Voya International

Very good diversification

The 3 months correlation between Auer and Voya is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Voya International Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya International Index and Auer Growth 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 Auer Growth Fund are associated (or correlated) with Voya International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya International Index has no effect on the direction of Auer Growth i.e., Auer Growth and Voya International go up and down completely randomly.

Pair Corralation between Auer Growth and Voya International

Assuming the 90 days horizon Auer Growth Fund is expected to under-perform the Voya International. In addition to that, Auer Growth is 1.18 times more volatile than Voya International Index. It trades about -0.02 of its total potential returns per unit of risk. Voya International Index is currently generating about 0.17 per unit of volatility. If you would invest  1,111  in Voya International Index on December 27, 2024 and sell it today you would earn a total of  101.00  from holding Voya International Index or generate 9.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Auer Growth Fund  vs.  Voya International Index

Auer Growth Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Auer Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Auer Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya International Index

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Voya International Index are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Voya International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Auer Growth and Voya International

The main advantage of trading using opposite Auer Growth and Voya International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth position performs unexpectedly, Voya International 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 International will offset losses from the drop in Voya International's long position.

The idea behind Auer Growth Fund and Voya International Index 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.