Correlation Between Kosmos Energy and Voya Index

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

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

Diversification Opportunities for Kosmos Energy and Voya Index

-0.02

Correlation Coefficient

Kosmos Energy  Voya Index

Good diversification

The 3 months correlation between Kosmos and VOYA is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kosmos Energy and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution and Kosmos Energy 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 Kosmos Energy are associated (or correlated) with Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Kosmos Energy i.e., Kosmos Energy and Voya Index go up and down completely randomly.

Pair Corralation between Kosmos Energy and Voya Index

Considering the 90-day investment horizon Kosmos Energy is expected to generate 5.33 times more return on investment than Voya Index. However, Kosmos Energy is 5.33 times more volatile than Voya Index Solution. It trades about 0.31 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.02 per unit of risk. If you would invest  308.00  in Kosmos Energy on October 22, 2024 and sell it today you would earn a total of  51.00  from holding Kosmos Energy or generate 16.56% return on investment over 90 days.

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

Kosmos Energy  vs.  Voya Index Solution

Kosmos Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kosmos Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Voya Index Solution

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Index Solution has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Voya Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kosmos Energy and Voya Index

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

The idea behind Kosmos Energy and Voya Index Solution 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.