Correlation Between Voya Emerging and Virtus AllianzGI

Can any of the company-specific risk be diversified away by investing in both Voya Emerging and Virtus AllianzGI 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 Emerging and Virtus AllianzGI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Voya Emerging Markets and Virtus AllianzGI Convertible, you can compare the effects of market volatilities on Voya Emerging and Virtus AllianzGI 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 Emerging with a short position of Virtus AllianzGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Emerging and Virtus AllianzGI.

Diversification Opportunities for Voya Emerging and Virtus AllianzGI

0.91

Correlation Coefficient

Voya Emerging  Virtus AllianzGI

Almost no diversification

The 3 months correlation between Voya and Virtus is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Voya Emerging Markets and Virtus AllianzGI Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus AllianzGI Con and Voya Emerging 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 Emerging Markets are associated (or correlated) with Virtus AllianzGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus AllianzGI Con has no effect on the direction of Voya Emerging i.e., Voya Emerging and Virtus AllianzGI go up and down completely randomly.

Pair Corralation between Voya Emerging and Virtus AllianzGI

Considering the 90-day investment horizon Voya Emerging Markets is expected to generate 1.66 times more return on investment than Virtus AllianzGI. However, Voya Emerging is 1.66 times more volatile than Virtus AllianzGI Convertible. It trades about 0.15 of its potential returns per unit of risk. Virtus AllianzGI Convertible is currently generating about 0.15 per unit of risk. If you would invest  492.00  in Voya Emerging Markets on December 19, 2024 and sell it today you would earn a total of  44.00  from holding Voya Emerging Markets or generate 8.94% return on investment over 90 days.

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

Voya Emerging Markets  vs.  Virtus AllianzGI Convertible

Voya Emerging Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Emerging Markets are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather inconsistent technical indicators, Voya Emerging may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Virtus AllianzGI Con

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus AllianzGI Convertible are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Virtus AllianzGI is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Voya Emerging and Virtus AllianzGI

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

The idea behind Voya Emerging Markets and Virtus AllianzGI Convertible 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.