Correlation Between Origin Emerging and Voya Global

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

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

Diversification Opportunities for Origin Emerging and Voya Global

0.34

Correlation Coefficient

Origin Emerging  Voya Global

Weak diversification

The 3 months correlation between Origin and Voya is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Origin Emerging Markets 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 Origin Emerging 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 Origin Emerging Markets 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 Origin Emerging i.e., Origin Emerging and Voya Global go up and down completely randomly.

Pair Corralation between Origin Emerging and Voya Global

Assuming the 90 days horizon Origin Emerging Markets is expected to generate 1.7 times more return on investment than Voya Global. However, Origin Emerging is 1.7 times more volatile than Voya Global Perspectives. It trades about 0.26 of its potential returns per unit of risk. Voya Global Perspectives is currently generating about 0.23 per unit of risk. If you would invest  1,016  in Origin Emerging Markets on September 15, 2024 and sell it today you would earn a total of  35.00  from holding Origin Emerging Markets or generate 3.44% return on investment over 90 days.

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

Origin Emerging Markets  vs.  Voya Global Perspectives

Origin Emerging Markets

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Origin Emerging Markets are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Origin Emerging 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

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Global Perspectives are ranked lower than 4 (%) 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 Origin Emerging and Voya Global

The main advantage of trading using opposite Origin Emerging and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Emerging 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 Origin Emerging Markets 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .