Correlation Between Champlain Small and Voya Emerging

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

By analyzing existing cross correlation between Champlain Small and Voya Emerging Markets, you can compare the effects of market volatilities on Champlain Small and Voya Emerging 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 Champlain Small with a short position of Voya Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Voya Emerging.

Diversification Opportunities for Champlain Small and Voya Emerging

-0.54

Correlation Coefficient

Champlain Small  Voya Emerging

Excellent diversification

The 3 months correlation between Champlain and Voya is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Voya Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Emerging Markets and Champlain Small 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 Champlain Small are associated (or correlated) with Voya Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Emerging Markets has no effect on the direction of Champlain Small i.e., Champlain Small and Voya Emerging go up and down completely randomly.

Pair Corralation between Champlain Small and Voya Emerging

If you would invest  1,049  in Voya Emerging Markets on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Voya Emerging Markets or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	2.44%
Values	Daily Returns

Champlain Small  vs.  Voya Emerging Markets

Champlain Small

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Champlain Small are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Champlain Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Champlain Small and Voya Emerging

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

The idea behind Champlain Small and Voya Emerging Markets 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.