Correlation Between Voya Russia and Special Opportunities

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

Diversification Opportunities for Voya Russia and Special Opportunities

0.72

Correlation Coefficient

Voya Russia  Special Opportunities

Poor diversification

The 3 months correlation between Voya and Special is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Voya Russia Fund and Special Opportunities Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Special Opportunities 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 Special Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Special Opportunities has no effect on the direction of Voya Russia i.e., Voya Russia and Special Opportunities go up and down completely randomly.

Pair Corralation between Voya Russia and Special Opportunities

Assuming the 90 days horizon Voya Russia Fund is expected to generate 11.47 times more return on investment than Special Opportunities. However, Voya Russia is 11.47 times more volatile than Special Opportunities Closed. It trades about 0.07 of its potential returns per unit of risk. Special Opportunities Closed is currently generating about 0.12 per unit of risk. If you would invest  37.00  in Voya Russia Fund on September 4, 2024 and sell it today you would earn a total of  31.00  from holding Voya Russia Fund or generate 83.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	30.71%
Values	Daily Returns

Voya Russia Fund  vs.  Special Opportunities Closed

Voya Russia Fund

Risk-Adjusted Performance

0 of 100

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.

Special Opportunities

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Special Opportunities Closed are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather unsteady basic indicators, Special Opportunities exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Voya Russia and Special Opportunities

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

The idea behind Voya Russia Fund and Special Opportunities Closed 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.