Correlation Between Absolute Convertible and Voya Smallcap

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

By analyzing existing cross correlation between Absolute Convertible Arbitrage and Voya Smallcap Opportunities, you can compare the effects of market volatilities on Absolute Convertible and Voya Smallcap 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 Absolute Convertible with a short position of Voya Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Voya Smallcap.

Diversification Opportunities for Absolute Convertible and Voya Smallcap

0.0

Correlation Coefficient

Absolute Convertible  Voya Smallcap

Pay attention - limited upside

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

Pair Corralation between Absolute Convertible and Voya Smallcap

If you would invest  1,132  in Absolute Convertible Arbitrage on September 12, 2024 and sell it today you would earn a total of  19.00  from holding Absolute Convertible Arbitrage or generate 1.68% return on investment over 90 days.

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

Absolute Convertible Arbitrage  vs.  Voya Smallcap Opportunities

Absolute Convertible

Risk-Adjusted Performance

40 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Absolute Convertible Arbitrage are ranked lower than 40 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Absolute Convertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Smallcap Opport

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Smallcap Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Voya Smallcap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Absolute Convertible and Voya Smallcap

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

The idea behind Absolute Convertible Arbitrage and Voya Smallcap Opportunities 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.