Correlation Between Voya Global and Voya Infrastructure

Can any of the company-specific risk be diversified away by investing in both Voya Global and Voya Infrastructure 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 Voya Infrastructure 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 Voya Infrastructure Industrials, you can compare the effects of market volatilities on Voya Global and Voya Infrastructure 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 Voya Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Global and Voya Infrastructure.

Diversification Opportunities for Voya Global and Voya Infrastructure

0.23

Correlation Coefficient

Voya Global  Voya Infrastructure

Modest diversification

The 3 months correlation between Voya and Voya is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Voya Global Advantage and Voya Infrastructure Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Infrastructure 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 Voya Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Infrastructure has no effect on the direction of Voya Global i.e., Voya Global and Voya Infrastructure go up and down completely randomly.

Pair Corralation between Voya Global and Voya Infrastructure

Considering the 90-day investment horizon Voya Global Advantage is expected to generate 0.47 times more return on investment than Voya Infrastructure. However, Voya Global Advantage is 2.11 times less risky than Voya Infrastructure. It trades about -0.05 of its potential returns per unit of risk. Voya Infrastructure Industrials is currently generating about -0.11 per unit of risk. If you would invest  942.00  in Voya Global Advantage on September 14, 2024 and sell it today you would lose (8.00) from holding Voya Global Advantage or give up 0.85% of portfolio value over 90 days.

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

Voya Global Advantage  vs.  Voya Infrastructure Industrial

Voya Global Advantage

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Global Advantage are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Voya Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Voya Infrastructure

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Infrastructure Industrials are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Voya Infrastructure is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Voya Global and Voya Infrastructure

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

The idea behind Voya Global Advantage and Voya Infrastructure Industrials 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 Transaction History module to view history of all your transactions and understand their impact on performance.