Correlation Between Baron Health and Voya Index
Can any of the company-specific risk be diversified away by investing in both Baron Health 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 Baron Health and Voya Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Health Care and Voya Index Solution, you can compare the effects of market volatilities on Baron Health 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 Baron Health with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Voya Index.
Diversification Opportunities for Baron Health and Voya Index
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baron and Voya is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care 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 Baron Health 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 Baron Health Care 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 Baron Health i.e., Baron Health and Voya Index go up and down completely randomly.
Pair Corralation between Baron Health and Voya Index
Assuming the 90 days horizon Baron Health is expected to generate 1.79 times less return on investment than Voya Index. In addition to that, Baron Health is 1.5 times more volatile than Voya Index Solution. It trades about 0.04 of its total potential returns per unit of risk. Voya Index Solution is currently generating about 0.12 per unit of volatility. If you would invest 1,139 in Voya Index Solution on September 1, 2024 and sell it today you would earn a total of 96.00 from holding Voya Index Solution or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Baron Health Care vs. Voya Index Solution
Performance |
| Timeline |
| Baron Health Care |
| Voya Index Solution |
Baron Health and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Voya Index
The main advantage of trading using opposite Baron Health and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health 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.| Baron Health vs. California High Yield Municipal | Baron Health vs. Franklin High Income | Baron Health vs. T Rowe Price | Baron Health vs. Needham Aggressive Growth |
| Voya Index vs. Voya Bond Index | Voya Index vs. Voya Bond Index | Voya Index vs. Voya Limited Maturity | Voya Index 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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