Correlation Between Voya Global and Capital Group

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

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

Diversification Opportunities for Voya Global and Capital Group

-0.47

Correlation Coefficient

Voya Global  Capital Group

Very good diversification

The 3 months correlation between Voya and Capital is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Voya Global Advantage and Capital Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Intern and Voya 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 Voya Global Advantage are associated (or correlated) with Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Intern has no effect on the direction of Voya Global i.e., Voya Global and Capital Group go up and down completely randomly.

Pair Corralation between Voya Global and Capital Group

Considering the 90-day investment horizon Voya Global Advantage is expected to generate 0.7 times more return on investment than Capital Group. However, Voya Global Advantage is 1.43 times less risky than Capital Group. It trades about 0.13 of its potential returns per unit of risk. Capital Group International is currently generating about -0.08 per unit of risk. If you would invest  924.00  in Voya Global Advantage on August 30, 2024 and sell it today you would earn a total of  45.00  from holding Voya Global Advantage or generate 4.87% return on investment over 90 days.

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

Voya Global Advantage  vs.  Capital Group International

Voya Global Advantage

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Global Advantage are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Voya Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Capital Group Intern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Group International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Capital Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Voya Global and Capital Group

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

The idea behind Voya Global Advantage and Capital Group International 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..