Correlation Between Voya Global and Columbia Seligman

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

Diversification Opportunities for Voya Global and Columbia Seligman

0.58

Correlation Coefficient

Voya Global  Columbia Seligman

Very weak diversification

The 3 months correlation between Voya and Columbia is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Voya Global Advantage and Columbia Seligman Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Seligman Premium 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 Columbia Seligman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Seligman Premium has no effect on the direction of Voya Global i.e., Voya Global and Columbia Seligman go up and down completely randomly.

Pair Corralation between Voya Global and Columbia Seligman

Considering the 90-day investment horizon Voya Global Advantage is expected to under-perform the Columbia Seligman. But the etf apears to be less risky and, when comparing its historical volatility, Voya Global Advantage is 1.65 times less risky than Columbia Seligman. The etf trades about -0.15 of its potential returns per unit of risk. The Columbia Seligman Premium is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  3,013  in Columbia Seligman Premium on September 21, 2024 and sell it today you would earn a total of  149.00  from holding Columbia Seligman Premium or generate 4.95% return on investment over 90 days.

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

Voya Global Advantage  vs.  Columbia Seligman Premium

Voya Global Advantage

Risk-Adjusted Performance

2 of 100

Very Weak

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 latest stock price disturbance, may contribute to short-term losses for the investors.

Columbia Seligman Premium

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Seligman Premium are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Columbia Seligman is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Voya Global and Columbia Seligman

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

The idea behind Voya Global Advantage and Columbia Seligman Premium 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.