Correlation Between Voya International and Vy(r) Templeton

Can any of the company-specific risk be diversified away by investing in both Voya International and Vy(r) Templeton 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 International and Vy(r) Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Voya International Index and Vy Templeton Foreign, you can compare the effects of market volatilities on Voya International and Vy(r) Templeton 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 International with a short position of Vy(r) Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya International and Vy(r) Templeton.

Diversification Opportunities for Voya International and Vy(r) Templeton

0.66

Correlation Coefficient

Voya International  Vy(r) Templeton

Poor diversification

The 3 months correlation between Voya and Vy(r) is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Voya International Index and Vy Templeton Foreign in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Templeton Foreign and Voya International 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 International Index are associated (or correlated) with Vy(r) Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Templeton Foreign has no effect on the direction of Voya International i.e., Voya International and Vy(r) Templeton go up and down completely randomly.

Pair Corralation between Voya International and Vy(r) Templeton

Assuming the 90 days horizon Voya International is expected to generate 1.27 times less return on investment than Vy(r) Templeton. In addition to that, Voya International is 1.27 times more volatile than Vy Templeton Foreign. It trades about 0.03 of its total potential returns per unit of risk. Vy Templeton Foreign is currently generating about 0.05 per unit of volatility. If you would invest  862.00  in Vy Templeton Foreign on October 8, 2024 and sell it today you would earn a total of  151.00  from holding Vy Templeton Foreign or generate 17.52% return on investment over 90 days.

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

Voya International Index  vs.  Vy Templeton Foreign

Voya International Index

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya International Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Vy Templeton Foreign

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vy Templeton Foreign has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Vy(r) Templeton 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 International and Vy(r) Templeton

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

The idea behind Voya International Index and Vy Templeton Foreign 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.