Correlation Between Voya Government and Ab International

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Can any of the company-specific risk be diversified away by investing in both Voya Government and Ab International 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 Government and Ab International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Government Money and Ab International Value, you can compare the effects of market volatilities on Voya Government and Ab International 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 Government with a short position of Ab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Government and Ab International.

Diversification Opportunities for Voya Government and Ab International

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Voya and ABIAX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Voya Government Money and Ab International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab International Value and Voya Government 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 Government Money are associated (or correlated) with Ab International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab International Value has no effect on the direction of Voya Government i.e., Voya Government and Ab International go up and down completely randomly.

Pair Corralation between Voya Government and Ab International

Assuming the 90 days horizon Voya Government Money is expected to generate 20.77 times more return on investment than Ab International. However, Voya Government is 20.77 times more volatile than Ab International Value. It trades about 0.04 of its potential returns per unit of risk. Ab International Value is currently generating about 0.03 per unit of risk. If you would invest  92.00  in Voya Government Money on October 24, 2024 and sell it today you would earn a total of  8.00  from holding Voya Government Money or generate 8.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Voya Government Money  vs.  Ab International Value

 Performance 
       Timeline  
Voya Government Money 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Voya Government Money has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Voya Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Ab International Value 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ab International Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ab International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Government and Ab International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Voya Government and Ab International

The main advantage of trading using opposite Voya Government and Ab International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Government position performs unexpectedly, Ab International 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 Ab International will offset losses from the drop in Ab International's long position.
The idea behind Voya Government Money and Ab International 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.
Check out your portfolio center.
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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