Correlation Between Voya Global and Ready Capital

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

Diversification Opportunities for Voya Global and Ready Capital

-0.71

Correlation Coefficient

Voya Global  Ready Capital

Pay attention - limited upside

The 3 months correlation between Voya and Ready is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Voya Global Advantage and Ready Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ready Capital 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 Ready Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ready Capital has no effect on the direction of Voya Global i.e., Voya Global and Ready Capital go up and down completely randomly.

Pair Corralation between Voya Global and Ready Capital

Considering the 90-day investment horizon Voya Global Advantage is expected to generate 7.67 times more return on investment than Ready Capital. However, Voya Global is 7.67 times more volatile than Ready Capital. It trades about 0.23 of its potential returns per unit of risk. Ready Capital is currently generating about -0.34 per unit of risk. If you would invest  932.00  in Voya Global Advantage on December 10, 2024 and sell it today you would earn a total of  29.00  from holding Voya Global Advantage or generate 3.11% return on investment over 90 days.

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

Voya Global Advantage  vs.  Ready Capital

Voya Global Advantage

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Global Advantage are ranked lower than 6 (%) 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.

Ready Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ready Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Ready Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Voya Global and Ready Capital

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

The idea behind Voya Global Advantage and Ready Capital 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.