Correlation Between Voya Large and Aberdeen Asia

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

By analyzing existing cross correlation between Voya Large Cap and Aberdeen Asia Pacificome, you can compare the effects of market volatilities on Voya Large and Aberdeen Asia 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 Large with a short position of Aberdeen Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Large and Aberdeen Asia.

Diversification Opportunities for Voya Large and Aberdeen Asia

-0.84

Correlation Coefficient

Voya Large  Aberdeen Asia

Pay attention - limited upside

The 3 months correlation between Voya and Aberdeen is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Voya Large Cap and Aberdeen Asia Pacificome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Asia Pacificome and Voya Large 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 Large Cap are associated (or correlated) with Aberdeen Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Asia Pacificome has no effect on the direction of Voya Large i.e., Voya Large and Aberdeen Asia go up and down completely randomly.

Pair Corralation between Voya Large and Aberdeen Asia

Assuming the 90 days horizon Voya Large is expected to generate 15.27 times less return on investment than Aberdeen Asia. But when comparing it to its historical volatility, Voya Large Cap is 27.21 times less risky than Aberdeen Asia. It trades about 0.11 of its potential returns per unit of risk. Aberdeen Asia Pacificome is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  311.00  in Aberdeen Asia Pacificome on September 20, 2024 and sell it today you would earn a total of  1,416  from holding Aberdeen Asia Pacificome or generate 455.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.6%
Values	Daily Returns

Voya Large Cap  vs.  Aberdeen Asia Pacificome

Voya Large Cap

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Large Cap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Voya Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aberdeen Asia Pacificome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aberdeen Asia Pacificome has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Voya Large and Aberdeen Asia

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

The idea behind Voya Large Cap and Aberdeen Asia Pacificome 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.