Correlation Between Voya Government and Vanguard Emerging
Can any of the company-specific risk be diversified away by investing in both Voya Government and Vanguard Emerging 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 Government and Vanguard Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Government Money and Vanguard Emerging Markets, you can compare the effects of market volatilities on Voya Government and Vanguard Emerging 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 Government with a short position of Vanguard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Government and Vanguard Emerging.
Diversification Opportunities for Voya Government and Vanguard Emerging
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Vanguard is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Voya Government Money and Vanguard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Emerging Markets and Voya Government 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 Government Money are associated (or correlated) with Vanguard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Emerging Markets has no effect on the direction of Voya Government i.e., Voya Government and Vanguard Emerging go up and down completely randomly.
Pair Corralation between Voya Government and Vanguard Emerging
Assuming the 90 days horizon Voya Government is expected to generate 11.9 times less return on investment than Vanguard Emerging. But when comparing it to its historical volatility, Voya Government Money is 5.18 times less risky than Vanguard Emerging. It trades about 0.13 of its potential returns per unit of risk. Vanguard Emerging Markets is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,833 in Vanguard Emerging Markets on April 24, 2025 and sell it today you would earn a total of 358.00 from holding Vanguard Emerging Markets or generate 12.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Voya Government Money vs. Vanguard Emerging Markets
Performance |
Timeline |
Voya Government Money |
Vanguard Emerging Markets |
Voya Government and Vanguard Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Voya Government and Vanguard Emerging
The main advantage of trading using opposite Voya Government and Vanguard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Government position performs unexpectedly, Vanguard Emerging 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 Vanguard Emerging will offset losses from the drop in Vanguard Emerging's long position.Voya Government vs. Payden High Income | Voya Government vs. Guggenheim High Yield | Voya Government vs. Jpmorgan High Yield | Voya Government vs. Prudential High Yield |
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Check out your portfolio center.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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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