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 Conservative and Voya Solution Conservative, 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
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Voya is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Conservative and Voya Solution Conservative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Solution Conser 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 Conservative 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 Conser 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 Conservative is expected to under-perform the Voya Solution. In addition to that, American Funds is 2.72 times more volatile than Voya Solution Conservative. It trades about -0.32 of its total potential returns per unit of risk. Voya Solution Conservative is currently generating about -0.23 per unit of volatility. If you would invest 1,040 in Voya Solution Conservative on October 14, 2024 and sell it today you would lose (13.00) from holding Voya Solution Conservative or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Conservative vs. Voya Solution Conservative
Performance |
| Timeline |
| American Funds Conse |
| Voya Solution Conser |
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. Ashmore Emerging Markets | American Funds vs. Extended Market Index | American Funds vs. T Rowe Price | American Funds vs. Oshaughnessy Market Leaders |
| Voya Solution vs. Victory Diversified Stock | Voya Solution vs. Diversified Bond Fund | Voya Solution vs. American Funds Conservative | Voya Solution vs. Columbia Diversified Equity |
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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