Correlation Between Sa Worldwide and Voya Large

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

By analyzing existing cross correlation between Sa Worldwide Moderate and Voya Large Cap, you can compare the effects of market volatilities on Sa Worldwide and Voya Large 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 Sa Worldwide with a short position of Voya Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sa Worldwide and Voya Large.

Diversification Opportunities for Sa Worldwide and Voya Large

0.78

Correlation Coefficient

Sa Worldwide  Voya Large

Poor diversification

The 3 months correlation between SAWMX and Voya is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sa Worldwide Moderate and Voya Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap and Sa Worldwide 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 Sa Worldwide Moderate are associated (or correlated) with Voya Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Sa Worldwide i.e., Sa Worldwide and Voya Large go up and down completely randomly.

Pair Corralation between Sa Worldwide and Voya Large

Assuming the 90 days horizon Sa Worldwide Moderate is expected to under-perform the Voya Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Sa Worldwide Moderate is 1.71 times less risky than Voya Large. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Voya Large Cap is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  597.00  in Voya Large Cap on September 20, 2024 and sell it today you would earn a total of  2.00  from holding Voya Large Cap or generate 0.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Sa Worldwide Moderate  vs.  Voya Large Cap

Sa Worldwide Moderate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Voya Large Cap

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Sa Worldwide and Voya Large

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

The idea behind Sa Worldwide Moderate and Voya Large Cap 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.