Correlation Between Ab Global and Voya Large

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

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

Diversification Opportunities for Ab Global and Voya Large

-0.56

Correlation Coefficient

Ab Global  Voya Large

Excellent diversification

The 3 months correlation between AEEIX and Voya is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Real and Voya Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap and Ab Global 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 Ab Global Real are associated (or correlated) with Voya Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Ab Global i.e., Ab Global and Voya Large go up and down completely randomly.

Pair Corralation between Ab Global and Voya Large

Assuming the 90 days horizon Ab Global Real is expected to under-perform the Voya Large. In addition to that, Ab Global is 1.37 times more volatile than Voya Large Cap. It trades about -0.2 of its total potential returns per unit of risk. Voya Large Cap is currently generating about 0.0 per unit of volatility. If you would invest  627.00  in Voya Large Cap on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Voya Large Cap or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ab Global Real  vs.  Voya Large Cap

Ab Global Real

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 strong basic indicators, Voya Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Global and Voya Large

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

The idea behind Ab Global Real and Voya Large Cap 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.