Correlation Between Jennison Natural and Voya Global

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

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

Diversification Opportunities for Jennison Natural and Voya Global

0.02

Correlation Coefficient

Jennison Natural  Voya Global

Significant diversification

The 3 months correlation between Jennison and Voya is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Jennison Natural Resources 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 Jennison Natural 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 Jennison Natural Resources 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 Jennison Natural i.e., Jennison Natural and Voya Global go up and down completely randomly.

Pair Corralation between Jennison Natural and Voya Global

Assuming the 90 days horizon Jennison Natural is expected to generate 10.7 times less return on investment than Voya Global. In addition to that, Jennison Natural is 2.53 times more volatile than Voya Global Perspectives. It trades about 0.0 of its total potential returns per unit of risk. Voya Global Perspectives is currently generating about 0.08 per unit of volatility. If you would invest  744.00  in Voya Global Perspectives on September 19, 2024 and sell it today you would earn a total of  155.00  from holding Voya Global Perspectives or generate 20.83% return on investment over 90 days.

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

Jennison Natural Resources  vs.  Voya Global Perspectives

Jennison Natural Res

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 Jennison Natural and Voya Global

The main advantage of trading using opposite Jennison Natural and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jennison Natural 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 Jennison Natural Resources 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.