Correlation Between Dws Emerging and Voya Index

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

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

Diversification Opportunities for Dws Emerging and Voya Index

-0.36

Correlation Coefficient

Dws Emerging  Voya Index

Very good diversification

The 3 months correlation between DWS and Voya is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dws Emerging Markets and Voya Index Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Plus and Dws Emerging 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 Dws Emerging Markets 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 Plus has no effect on the direction of Dws Emerging i.e., Dws Emerging and Voya Index go up and down completely randomly.

Pair Corralation between Dws Emerging and Voya Index

Assuming the 90 days horizon Dws Emerging Markets is expected to generate 1.09 times more return on investment than Voya Index. However, Dws Emerging is 1.09 times more volatile than Voya Index Plus. It trades about 0.09 of its potential returns per unit of risk. Voya Index Plus is currently generating about -0.08 per unit of risk. If you would invest  1,845  in Dws Emerging Markets on December 19, 2024 and sell it today you would earn a total of  103.00  from holding Dws Emerging Markets or generate 5.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Dws Emerging Markets  vs.  Voya Index Plus

Dws Emerging Markets

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dws Emerging Markets are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dws Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Index Plus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voya Index Plus has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic 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 Dws Emerging and Voya Index

The main advantage of trading using opposite Dws Emerging and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dws Emerging 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 Dws Emerging Markets and Voya Index Plus 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.