Correlation Between Calvert Emerging and Voya Solution

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

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

Diversification Opportunities for Calvert Emerging and Voya Solution

0.07

Correlation Coefficient

Calvert Emerging  Voya Solution

Significant diversification

The 3 months correlation between Calvert and Voya is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Emerging Markets and Voya Solution Aggressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Solution Aggressive and Calvert Emerging 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 Calvert Emerging Markets are associated (or correlated) with Voya Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Solution Aggressive has no effect on the direction of Calvert Emerging i.e., Calvert Emerging and Voya Solution go up and down completely randomly.

Pair Corralation between Calvert Emerging and Voya Solution

Assuming the 90 days horizon Calvert Emerging Markets is expected to under-perform the Voya Solution. In addition to that, Calvert Emerging is 1.26 times more volatile than Voya Solution Aggressive. It trades about -0.12 of its total potential returns per unit of risk. Voya Solution Aggressive is currently generating about 0.02 per unit of volatility. If you would invest  1,459  in Voya Solution Aggressive on October 23, 2024 and sell it today you would earn a total of  4.00  from holding Voya Solution Aggressive or generate 0.27% return on investment over 90 days.

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

Calvert Emerging Markets  vs.  Voya Solution Aggressive

Calvert Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calvert Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Voya Solution Aggressive

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Solution Aggressive are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Voya Solution is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calvert Emerging and Voya Solution

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

The idea behind Calvert Emerging Markets and Voya Solution Aggressive 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.