Correlation Between Intermediate-term and Voya Russia

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

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

Diversification Opportunities for Intermediate-term and Voya Russia

0.0

Correlation Coefficient

Intermediate-term  Voya Russia

Pay attention - limited upside

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

Pair Corralation between Intermediate-term and Voya Russia

If you would invest  1,059  in Intermediate Term Tax Free Bond on December 23, 2024 and sell it today you would earn a total of  9.00  from holding Intermediate Term Tax Free Bond or generate 0.85% return on investment over 90 days.

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

Intermediate Term Tax Free Bon  vs.  Voya Russia Fund

Intermediate Term Tax

Risk-Adjusted Performance

Modest

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

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.

Pair Trading with Intermediate-term and Voya Russia

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

The idea behind Intermediate Term Tax Free Bond and Voya Russia Fund 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.