Correlation Between Voya Global and Zions Bancorporation

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

Diversification Opportunities for Voya Global and Zions Bancorporation

-0.48

Correlation Coefficient

Voya Global  Zions Bancorporation

Very good diversification

The 3 months correlation between Voya and Zions is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Voya Global Advantage and Zions Bancorp. NA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zions Bancorporation 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 Zions Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zions Bancorporation has no effect on the direction of Voya Global i.e., Voya Global and Zions Bancorporation go up and down completely randomly.

Pair Corralation between Voya Global and Zions Bancorporation

Considering the 90-day investment horizon Voya Global Advantage is expected to generate 1.98 times more return on investment than Zions Bancorporation. However, Voya Global is 1.98 times more volatile than Zions Bancorporation NA. It trades about -0.04 of its potential returns per unit of risk. Zions Bancorporation NA is currently generating about -0.17 per unit of risk. If you would invest  937.00  in Voya Global Advantage on September 22, 2024 and sell it today you would lose (11.00) from holding Voya Global Advantage or give up 1.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.02%
Values	Daily Returns

Voya Global Advantage  vs.  Zions Bancorp. NA

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.

Zions Bancorporation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zions Bancorporation NA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Zions Bancorporation is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Voya Global and Zions Bancorporation

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

The idea behind Voya Global Advantage and Zions Bancorporation NA 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.