Correlation Between American Funds and Voya Large
Can any of the company-specific risk be diversified away by investing in both American Funds and Voya Large 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 Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds American and Voya Large Cap, you can compare the effects of market volatilities on American Funds and Voya Large 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 Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Voya Large.
Diversification Opportunities for American Funds and Voya Large
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Voya is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding American Funds American and Voya Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap 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 American are associated (or correlated) with Voya Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of American Funds i.e., American Funds and Voya Large go up and down completely randomly.
Pair Corralation between American Funds and Voya Large
Assuming the 90 days horizon American Funds American is expected to generate 0.76 times more return on investment than Voya Large. However, American Funds American is 1.32 times less risky than Voya Large. It trades about 0.13 of its potential returns per unit of risk. Voya Large Cap is currently generating about 0.08 per unit of risk. If you would invest 5,223 in American Funds American on September 1, 2024 and sell it today you would earn a total of 815.00 from holding American Funds American or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
American Funds American vs. Voya Large Cap
Performance |
| Timeline |
| American Funds American |
| Voya Large Cap |
American Funds and Voya Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Voya Large
The main advantage of trading using opposite American Funds and Voya Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Voya Large 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 Large will offset losses from the drop in Voya Large's long position.| American Funds vs. Vanguard Developed Markets | American Funds vs. Pnc Emerging Markets | American Funds vs. Transamerica Emerging Markets | American Funds vs. Ep Emerging Markets |
| Voya Large vs. Voya Bond Index | Voya Large vs. Voya Bond Index | Voya Large vs. Voya Limited Maturity | Voya Large 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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