Correlation Between Voya Russia and Tweedy Browne

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

Diversification Opportunities for Voya Russia and Tweedy Browne

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Correlation Coefficient

Voya Russia  Tweedy Browne

Pay attention - limited upside

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

Pair Corralation between Voya Russia and Tweedy Browne

Assuming the 90 days horizon Voya Russia Fund is expected to generate 10.32 times more return on investment than Tweedy Browne. However, Voya Russia is 10.32 times more volatile than Tweedy Browne Global. It trades about 0.09 of its potential returns per unit of risk. Tweedy Browne Global is currently generating about -0.01 per unit of risk. If you would invest  36.00  in Voya Russia Fund on October 26, 2024 and sell it today you would earn a total of  32.00  from holding Voya Russia Fund or generate 88.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	23.68%
Values	Daily Returns

Voya Russia Fund  vs.  Tweedy Browne Global

Voya Russia Fund

Risk-Adjusted Performance

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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.

Tweedy Browne Global

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Tweedy Browne Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Voya Russia and Tweedy Browne

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

The idea behind Voya Russia Fund and Tweedy Browne Global 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.