Correlation Between Voya Government and Wcm Small

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

Diversification Opportunities for Voya Government and Wcm Small

0.0

Correlation Coefficient

Voya Government  Wcm Small

Pay attention - limited upside

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

Pair Corralation between Voya Government and Wcm Small

If you would invest  1,302  in Wcm Small Cap on October 9, 2024 and sell it today you would lose (1.00) from holding Wcm Small Cap or give up 0.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Voya Government Money  vs.  Wcm Small Cap

Voya Government Money

Risk-Adjusted Performance

0 of 100

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.

Wcm Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wcm Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Wcm Small 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 Government and Wcm Small

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

The idea behind Voya Government Money and Wcm Small Cap 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.