Correlation Between American Funds and Voya Solution
Can any of the company-specific risk be diversified away by investing in both American Funds and Voya Solution 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 American Funds and Voya Solution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2060 and Voya Solution 2060, you can compare the effects of market volatilities on American Funds and Voya Solution 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 American Funds with a short position of Voya Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Voya Solution.
Diversification Opportunities for American Funds and Voya Solution
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Voya is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2060 and Voya Solution 2060 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Solution 2060 and American Funds 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 American Funds 2060 are associated (or correlated) with Voya Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Solution 2060 has no effect on the direction of American Funds i.e., American Funds and Voya Solution go up and down completely randomly.
Pair Corralation between American Funds and Voya Solution
Assuming the 90 days horizon American Funds 2060 is expected to generate 0.12 times more return on investment than Voya Solution. However, American Funds 2060 is 8.24 times less risky than Voya Solution. It trades about 0.09 of its potential returns per unit of risk. Voya Solution 2060 is currently generating about -0.35 per unit of risk. If you would invest 1,792 in American Funds 2060 on August 31, 2024 and sell it today you would earn a total of 22.00 from holding American Funds 2060 or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 36.36% |
| Values | Daily Returns |
American Funds 2060 vs. Voya Solution 2060
Performance |
| Timeline |
| American Funds 2060 |
| Voya Solution 2060 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Funds and Voya Solution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Voya Solution
The main advantage of trading using opposite American Funds and Voya Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Voya Solution 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 Solution will offset losses from the drop in Voya Solution's long position.| American Funds vs. Prudential Jennison Financial | American Funds vs. Royce Global Financial | American Funds vs. Davis Financial Fund | American Funds vs. Blackrock Financial Institutions |
| Voya Solution vs. American Funds 2060 | Voya Solution vs. American Funds 2060 | Voya Solution vs. American Funds 2060 | Voya Solution vs. T Rowe Price |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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