Correlation Between Scharf Global and Voya Global

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

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

Diversification Opportunities for Scharf Global and Voya Global

0.81

Correlation Coefficient

Scharf Global  Voya Global

Very poor diversification

The 3 months correlation between Scharf and Voya is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Voya Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Equity and Scharf 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 Scharf Global Opportunity 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 Equity has no effect on the direction of Scharf Global i.e., Scharf Global and Voya Global go up and down completely randomly.

Pair Corralation between Scharf Global and Voya Global

Assuming the 90 days horizon Scharf Global is expected to generate 1.07 times less return on investment than Voya Global. In addition to that, Scharf Global is 1.13 times more volatile than Voya Global Equity. It trades about 0.07 of its total potential returns per unit of risk. Voya Global Equity is currently generating about 0.09 per unit of volatility. If you would invest  4,564  in Voya Global Equity on September 12, 2024 and sell it today you would earn a total of  123.00  from holding Voya Global Equity or generate 2.7% return on investment over 90 days.

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

Scharf Global Opportunity  vs.  Voya Global Equity

Scharf Global Opportunity

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Scharf Global Opportunity are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Scharf Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Global Equity

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Global Equity are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly 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.

Pair Trading with Scharf Global and Voya Global

The main advantage of trading using opposite Scharf Global and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global 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 Scharf Global Opportunity and Voya Global Equity 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.