Correlation Between Voya Russia and Capital World

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

By analyzing existing cross correlation between Voya Russia Fund and Capital World Bond, you can compare the effects of market volatilities on Voya Russia and Capital World 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 Russia with a short position of Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Russia and Capital World.

Diversification Opportunities for Voya Russia and Capital World

0.0

Correlation Coefficient

Voya Russia  Capital World

Pay attention - limited upside

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

Pair Corralation between Voya Russia and Capital World

If you would invest  1,548  in Capital World Bond on December 29, 2024 and sell it today you would earn a total of  43.00  from holding Capital World Bond or generate 2.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Voya Russia Fund  vs.  Capital World Bond

Voya Russia Fund

Risk-Adjusted Performance

Very Weak

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

Capital World Bond

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capital World Bond are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Capital World 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 Russia and Capital World

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

The idea behind Voya Russia Fund and Capital World Bond 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.