Correlation Between Voya Global and Congress Mid

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Can any of the company-specific risk be diversified away by investing in both Voya Global and Congress Mid 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 Global and Congress Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Global Equity and Congress Mid Cap, you can compare the effects of market volatilities on Voya Global and Congress Mid 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 Global with a short position of Congress Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Global and Congress Mid.

Diversification Opportunities for Voya Global and Congress Mid

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Voya and Congress is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding VOYA GLOBAL EQUITY and CONGRESS MID CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Congress Mid Cap and Voya 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 Voya Global Equity are associated (or correlated) with Congress Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Congress Mid Cap has no effect on the direction of Voya Global i.e., Voya Global and Congress Mid go up and down completely randomly.

Pair Corralation between Voya Global and Congress Mid

Assuming the 90 days horizon Voya Global is expected to generate 1.29 times less return on investment than Congress Mid. But when comparing it to its historical volatility, Voya Global Equity is 1.7 times less risky than Congress Mid. It trades about 0.02 of its potential returns per unit of risk. Congress Mid Cap is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,468  in Congress Mid Cap on December 29, 2023 and sell it today you would earn a total of  200.00  from holding Congress Mid Cap or generate 8.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.8%
ValuesDaily Returns

VOYA GLOBAL EQUITY  vs.  CONGRESS MID CAP

 Performance 
       Timeline  
Voya Global Equity 

Risk-Adjusted Performance

20 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Voya Global Equity are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Voya Global may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Congress Mid Cap 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Congress Mid Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly fragile fundamental indicators, Congress Mid may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Voya Global and Congress Mid Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Voya Global and Congress Mid

The main advantage of trading using opposite Voya Global and Congress Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Global position performs unexpectedly, Congress Mid 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 Congress Mid will offset losses from the drop in Congress Mid's long position.
The idea behind Voya Global Equity and Congress Mid 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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