Correlation Between California High-yield and Voya Index
Can any of the company-specific risk be diversified away by investing in both California High-yield and Voya Index 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 California High-yield and Voya Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California High Yield Municipal and Voya Index Solution, you can compare the effects of market volatilities on California High-yield and Voya Index 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 California High-yield with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of California High-yield and Voya Index.
Diversification Opportunities for California High-yield and Voya Index
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between California and Voya is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding California High Yield Municipa and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution and California High-yield 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 California High Yield Municipal are associated (or correlated) with Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of California High-yield i.e., California High-yield and Voya Index go up and down completely randomly.
Pair Corralation between California High-yield and Voya Index
Assuming the 90 days horizon California High-yield is expected to generate 3.95 times less return on investment than Voya Index. But when comparing it to its historical volatility, California High Yield Municipal is 2.16 times less risky than Voya Index. It trades about 0.07 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,535 in Voya Index Solution on September 2, 2024 and sell it today you would earn a total of 75.00 from holding Voya Index Solution or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
California High Yield Municipa vs. Voya Index Solution
Performance |
| Timeline |
| California High Yield |
| Voya Index Solution |
California High-yield and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California High-yield and Voya Index
The main advantage of trading using opposite California High-yield and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California High-yield position performs unexpectedly, Voya Index 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 Index will offset losses from the drop in Voya Index's long position.| California High-yield vs. Equity Growth Fund | California High-yield vs. Income Growth Fund | California High-yield vs. Diversified Bond Fund | California High-yield vs. Emerging Markets Fund |
| Voya Index vs. Volumetric Fund Volumetric | Voya Index vs. Commonwealth Global Fund | Voya Index vs. Vanguard Small Cap Growth | Voya Index vs. Shelton Funds |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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