Correlation Between Voya Midcap and Voya Global

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

By analyzing existing cross correlation between Voya Midcap Opportunities and Voya Global Perspectives, you can compare the effects of market volatilities on Voya Midcap and Voya Global 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 Midcap with a short position of Voya Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Midcap and Voya Global.

Diversification Opportunities for Voya Midcap and Voya Global

0.63

Correlation Coefficient

Voya Midcap  Voya Global

Poor diversification

The 3 months correlation between Voya and Voya is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Voya Midcap Opportunities and Voya Global Perspectives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Perspectives and Voya Midcap 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 Midcap Opportunities are associated (or correlated) with Voya Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Global Perspectives has no effect on the direction of Voya Midcap i.e., Voya Midcap and Voya Global go up and down completely randomly.

Pair Corralation between Voya Midcap and Voya Global

Assuming the 90 days horizon Voya Midcap Opportunities is expected to under-perform the Voya Global. In addition to that, Voya Midcap is 3.05 times more volatile than Voya Global Perspectives. It trades about -0.27 of its total potential returns per unit of risk. Voya Global Perspectives is currently generating about -0.03 per unit of volatility. If you would invest  904.00  in Voya Global Perspectives on December 2, 2024 and sell it today you would lose (3.00) from holding Voya Global Perspectives or give up 0.33% of portfolio value over 90 days.

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

Voya Midcap Opportunities  vs.  Voya Global Perspectives

Voya Midcap Opportunities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voya Midcap Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Voya Global Perspectives

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voya Global Perspectives has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Voya Global 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 Midcap and Voya Global

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

The idea behind Voya Midcap Opportunities and Voya Global Perspectives 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.