Correlation Between Applied Finance and Voya High
Can any of the company-specific risk be diversified away by investing in both Applied Finance and Voya High 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 Applied Finance and Voya High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Voya High Yield, you can compare the effects of market volatilities on Applied Finance and Voya High 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 Applied Finance with a short position of Voya High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Voya High.
Diversification Opportunities for Applied Finance and Voya High
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Applied and Voya is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Voya High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya High Yield and Applied Finance 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 Applied Finance Explorer are associated (or correlated) with Voya High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya High Yield has no effect on the direction of Applied Finance i.e., Applied Finance and Voya High go up and down completely randomly.
Pair Corralation between Applied Finance and Voya High
Assuming the 90 days horizon Applied Finance Explorer is expected to generate 7.24 times more return on investment than Voya High. However, Applied Finance is 7.24 times more volatile than Voya High Yield. It trades about 0.05 of its potential returns per unit of risk. Voya High Yield is currently generating about 0.14 per unit of risk. If you would invest 2,047 in Applied Finance Explorer on September 23, 2024 and sell it today you would earn a total of 164.00 from holding Applied Finance Explorer or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Finance Explorer vs. Voya High Yield
Performance |
| Timeline |
| Applied Finance Explorer |
| Voya High Yield |
Applied Finance and Voya High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Finance and Voya High
The main advantage of trading using opposite Applied Finance and Voya High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance position performs unexpectedly, Voya High 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 High will offset losses from the drop in Voya High's long position.| Applied Finance vs. Thrivent Small Cap | Applied Finance vs. Applied Finance Select | Applied Finance vs. Parnassus Endeavor Fund | Applied Finance vs. Queens Road Small |
| Voya High vs. John Hancock Ii | Voya High vs. Vanguard Small Cap Value | Voya High vs. Applied Finance Explorer | Voya High vs. Mutual Of America |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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