Correlation Between Voya Global and Invesco Pennsylvania

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

Diversification Opportunities for Voya Global and Invesco Pennsylvania

0.7

Correlation Coefficient

Voya Global  Invesco Pennsylvania

Poor diversification

The 3 months correlation between Voya and Invesco is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Voya Global Advantage and Invesco Pennsylvania Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Pennsylvania 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 Invesco Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Pennsylvania has no effect on the direction of Voya Global i.e., Voya Global and Invesco Pennsylvania go up and down completely randomly.

Pair Corralation between Voya Global and Invesco Pennsylvania

Considering the 90-day investment horizon Voya Global Advantage is expected to generate 1.21 times more return on investment than Invesco Pennsylvania. However, Voya Global is 1.21 times more volatile than Invesco Pennsylvania Value. It trades about 0.19 of its potential returns per unit of risk. Invesco Pennsylvania Value is currently generating about 0.01 per unit of risk. If you would invest  908.00  in Voya Global Advantage on December 27, 2024 and sell it today you would earn a total of  71.00  from holding Voya Global Advantage or generate 7.82% return on investment over 90 days.

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

Voya Global Advantage  vs.  Invesco Pennsylvania Value

Voya Global Advantage

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Global Advantage are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent technical and fundamental indicators, Voya Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Invesco Pennsylvania

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco Pennsylvania Value has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Invesco Pennsylvania is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Voya Global and Invesco Pennsylvania

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

The idea behind Voya Global Advantage and Invesco Pennsylvania Value 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.