Correlation Between Amazon and Voya Vacs
Can any of the company-specific risk be diversified away by investing in both Amazon and Voya Vacs 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 Amazon and Voya Vacs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Voya Vacs Index, you can compare the effects of market volatilities on Amazon and Voya Vacs 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 Amazon with a short position of Voya Vacs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Voya Vacs.
Diversification Opportunities for Amazon and Voya Vacs
Excellent diversification
The 3 months correlation between Amazon and Voya is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Voya Vacs Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Vacs Index and Amazon 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 Amazon Inc are associated (or correlated) with Voya Vacs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Vacs Index has no effect on the direction of Amazon i.e., Amazon and Voya Vacs go up and down completely randomly.
Pair Corralation between Amazon and Voya Vacs
Given the investment horizon of 90 days Amazon Inc is expected to generate 2.19 times more return on investment than Voya Vacs. However, Amazon is 2.19 times more volatile than Voya Vacs Index. It trades about 0.09 of its potential returns per unit of risk. Voya Vacs Index is currently generating about 0.04 per unit of risk. If you would invest 12,996 in Amazon Inc on September 12, 2024 and sell it today you would earn a total of 9,508 from holding Amazon Inc or generate 73.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. Voya Vacs Index
Performance |
| Timeline |
| Amazon Inc |
| Voya Vacs Index |
Amazon and Voya Vacs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Voya Vacs
The main advantage of trading using opposite Amazon and Voya Vacs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Voya Vacs 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 Vacs will offset losses from the drop in Voya Vacs' long position.The idea behind Amazon Inc and Voya Vacs Index 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.| Voya Vacs vs. SCOR PK | Voya Vacs vs. Morningstar Unconstrained Allocation | Voya Vacs vs. Via Renewables | Voya Vacs vs. Bondbloxx ETF Trust |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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