Correlation Between Asia Pacific and Voya Russia

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

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

Diversification Opportunities for Asia Pacific and Voya Russia

-0.63

Correlation Coefficient

Asia Pacific  Voya Russia

Excellent diversification

The 3 months correlation between Asia and Voya is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Asia Pacific Small 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 Asia Pacific 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 Asia Pacific Small 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 Asia Pacific i.e., Asia Pacific and Voya Russia go up and down completely randomly.

Pair Corralation between Asia Pacific and Voya Russia

Assuming the 90 days horizon Asia Pacific Small is expected to under-perform the Voya Russia. But the mutual fund apears to be less risky and, when comparing its historical volatility, Asia Pacific Small is 8.9 times less risky than Voya Russia. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Voya Russia Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  37.00  in Voya Russia Fund on September 28, 2024 and sell it today you would earn a total of  31.00  from holding Voya Russia Fund or generate 83.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	27.42%
Values	Daily Returns

Asia Pacific Small  vs.  Voya Russia Fund

Asia Pacific Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Pacific Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Voya Russia Fund

Risk-Adjusted Performance

0 of 100

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 technical and fundamental 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 Asia Pacific and Voya Russia

The main advantage of trading using opposite Asia Pacific and Voya Russia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Pacific 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 Asia Pacific Small 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.