Correlation Between Aqr Sustainable and Voya Global

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

By analyzing existing cross correlation between Aqr Sustainable Long Short and Voya Global Equity, you can compare the effects of market volatilities on Aqr Sustainable and Voya Global 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 Aqr Sustainable with a short position of Voya Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Sustainable and Voya Global.

Diversification Opportunities for Aqr Sustainable and Voya Global

0.67

Correlation Coefficient

Aqr Sustainable  Voya Global

Poor diversification

The 3 months correlation between Aqr and Voya is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Voya Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Equity and Aqr Sustainable 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 Aqr Sustainable Long Short are associated (or correlated) with Voya Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Global Equity has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Voya Global go up and down completely randomly.

Pair Corralation between Aqr Sustainable and Voya Global

Assuming the 90 days horizon Aqr Sustainable is expected to generate 2.85 times less return on investment than Voya Global. In addition to that, Aqr Sustainable is 1.34 times more volatile than Voya Global Equity. It trades about 0.06 of its total potential returns per unit of risk. Voya Global Equity is currently generating about 0.23 per unit of volatility. If you would invest  4,520  in Voya Global Equity on December 19, 2024 and sell it today you would earn a total of  385.00  from holding Voya Global Equity or generate 8.52% return on investment over 90 days.

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

Aqr Sustainable Long Short  vs.  Voya Global Equity

Aqr Sustainable Long

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Sustainable Long Short are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Aqr Sustainable is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Global Equity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Global Equity are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Voya Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aqr Sustainable and Voya Global

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

The idea behind Aqr Sustainable Long Short and Voya Global Equity 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.