Correlation Between World Energy and Voya Global

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

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

Diversification Opportunities for World Energy and Voya Global

0.39

Correlation Coefficient

World Energy  Voya Global

Weak diversification

The 3 months correlation between World and Voya is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding World Energy Fund and Voya Global Perspectives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Perspectives and World Energy 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 World Energy Fund 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 Perspectives has no effect on the direction of World Energy i.e., World Energy and Voya Global go up and down completely randomly.

Pair Corralation between World Energy and Voya Global

Assuming the 90 days horizon World Energy Fund is expected to generate 2.74 times more return on investment than Voya Global. However, World Energy is 2.74 times more volatile than Voya Global Perspectives. It trades about 0.11 of its potential returns per unit of risk. Voya Global Perspectives is currently generating about 0.02 per unit of risk. If you would invest  1,348  in World Energy Fund on September 19, 2024 and sell it today you would earn a total of  102.00  from holding World Energy Fund or generate 7.57% return on investment over 90 days.

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

World Energy Fund  vs.  Voya Global Perspectives

World Energy

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in World Energy Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, World Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Voya Global Perspectives

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Global Perspectives are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Voya Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with World Energy and Voya Global

The main advantage of trading using opposite World Energy and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Energy 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 World Energy Fund and Voya Global Perspectives 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.