Correlation Between Morningstar Aggressive and Voya Investment
Can any of the company-specific risk be diversified away by investing in both Morningstar Aggressive and Voya Investment 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 Morningstar Aggressive and Voya Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morningstar Aggressive Growth and Voya Investment Grade, you can compare the effects of market volatilities on Morningstar Aggressive and Voya Investment 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 Morningstar Aggressive with a short position of Voya Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morningstar Aggressive and Voya Investment.
Diversification Opportunities for Morningstar Aggressive and Voya Investment
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Morningstar and Voya is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Morningstar Aggressive Growth and Voya Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Investment Grade and Morningstar Aggressive 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 Morningstar Aggressive Growth are associated (or correlated) with Voya Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Investment Grade has no effect on the direction of Morningstar Aggressive i.e., Morningstar Aggressive and Voya Investment go up and down completely randomly.
Pair Corralation between Morningstar Aggressive and Voya Investment
Assuming the 90 days horizon Morningstar Aggressive Growth is expected to generate 2.09 times more return on investment than Voya Investment. However, Morningstar Aggressive is 2.09 times more volatile than Voya Investment Grade. It trades about 0.27 of its potential returns per unit of risk. Voya Investment Grade is currently generating about 0.05 per unit of risk. If you would invest 1,535 in Morningstar Aggressive Growth on November 2, 2024 and sell it today you would earn a total of 58.00 from holding Morningstar Aggressive Growth or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morningstar Aggressive Growth vs. Voya Investment Grade
Performance |
| Timeline |
| Morningstar Aggressive |
| Voya Investment Grade |
Morningstar Aggressive and Voya Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morningstar Aggressive and Voya Investment
The main advantage of trading using opposite Morningstar Aggressive and Voya Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morningstar Aggressive position performs unexpectedly, Voya Investment 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 Investment will offset losses from the drop in Voya Investment's long position.| Morningstar Aggressive vs. Hartford Healthcare Hls | Morningstar Aggressive vs. Baillie Gifford Health | Morningstar Aggressive vs. Baron Health Care | Morningstar Aggressive vs. Health Care Fund |
| Voya Investment vs. Voya Bond Index | Voya Investment vs. Voya Bond Index | Voya Investment vs. Voya Limited Maturity | Voya Investment 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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