Correlation Between American Balanced and Voya Solution
Can any of the company-specific risk be diversified away by investing in both American Balanced and Voya Solution 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 American Balanced and Voya Solution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced and Voya Solution Balanced, you can compare the effects of market volatilities on American Balanced and Voya Solution 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 American Balanced with a short position of Voya Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Voya Solution.
Diversification Opportunities for American Balanced and Voya Solution
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Voya is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced and Voya Solution Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Solution Balanced and American Balanced 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 American Balanced are associated (or correlated) with Voya Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Solution Balanced has no effect on the direction of American Balanced i.e., American Balanced and Voya Solution go up and down completely randomly.
Pair Corralation between American Balanced and Voya Solution
Assuming the 90 days horizon American Balanced is expected to generate 0.86 times more return on investment than Voya Solution. However, American Balanced is 1.16 times less risky than Voya Solution. It trades about 0.1 of its potential returns per unit of risk. Voya Solution Balanced is currently generating about 0.06 per unit of risk. If you would invest 2,836 in American Balanced on September 2, 2024 and sell it today you would earn a total of 858.00 from holding American Balanced or generate 30.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Balanced vs. Voya Solution Balanced
Performance |
| Timeline |
| American Balanced |
| Voya Solution Balanced |
American Balanced and Voya Solution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Voya Solution
The main advantage of trading using opposite American Balanced and Voya Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, Voya Solution 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 Solution will offset losses from the drop in Voya Solution's long position.| American Balanced vs. Income Fund Of | American Balanced vs. Capital Income Builder | American Balanced vs. Capital World Growth | American Balanced vs. Growth Fund Of |
| Voya Solution vs. Voya Bond Index | Voya Solution vs. Voya Bond Index | Voya Solution vs. Voya Limited Maturity | Voya Solution vs. Voya Limited Maturity |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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