Correlation Between Voya Global and DHCNI
Can any of the company-specific risk be diversified away by investing in both Voya Global and DHCNI 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 Global and DHCNI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Global Advantage and DHCNI, you can compare the effects of market volatilities on Voya Global and DHCNI 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 Global with a short position of DHCNI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Global and DHCNI.
Diversification Opportunities for Voya Global and DHCNI
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Voya and DHCNI is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Voya Global Advantage and DHCNI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHCNI and Voya Global 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 Global Advantage are associated (or correlated) with DHCNI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHCNI has no effect on the direction of Voya Global i.e., Voya Global and DHCNI go up and down completely randomly.
Pair Corralation between Voya Global and DHCNI
Considering the 90-day investment horizon Voya Global Advantage is expected to generate 0.39 times more return on investment than DHCNI. However, Voya Global Advantage is 2.54 times less risky than DHCNI. It trades about 0.14 of its potential returns per unit of risk. DHCNI is currently generating about 0.04 per unit of risk. If you would invest 706.00 in Voya Global Advantage on December 7, 2024 and sell it today you would earn a total of 257.00 from holding Voya Global Advantage or generate 36.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Voya Global Advantage vs. DHCNI
Performance |
Timeline |
Voya Global Advantage |
DHCNI |
Voya Global and DHCNI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Voya Global and DHCNI
The main advantage of trading using opposite Voya Global and DHCNI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Global position performs unexpectedly, DHCNI 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 DHCNI will offset losses from the drop in DHCNI's long position.Voya Global vs. Western Asset High | Voya Global vs. Western Asset Global | Voya Global vs. Western Asset High | Voya Global vs. Voya Global Equity |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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