Correlation Between Voya Asia and Clough Global

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

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

Diversification Opportunities for Voya Asia and Clough Global

0.54

Correlation Coefficient

Voya Asia  Clough Global

Very weak diversification

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

Pair Corralation between Voya Asia and Clough Global

Considering the 90-day investment horizon Voya Asia Pacific is expected to generate 1.16 times more return on investment than Clough Global. However, Voya Asia is 1.16 times more volatile than Clough Global Allocation. It trades about 0.34 of its potential returns per unit of risk. Clough Global Allocation is currently generating about 0.04 per unit of risk. If you would invest  610.00  in Voya Asia Pacific on November 29, 2024 and sell it today you would earn a total of  26.00  from holding Voya Asia Pacific or generate 4.26% return on investment over 90 days.

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

Voya Asia Pacific  vs.  Clough Global Allocation

Voya Asia Pacific

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Asia Pacific are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Voya Asia is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Clough Global Allocation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clough Global Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable essential indicators, Clough Global is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Voya Asia and Clough Global

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

The idea behind Voya Asia Pacific and Clough Global Allocation 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.