Correlation Between General Money and Voya Intermediate
Can any of the company-specific risk be diversified away by investing in both General Money and Voya Intermediate 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 General Money and Voya Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Money Market and Voya Intermediate Bond, you can compare the effects of market volatilities on General Money and Voya Intermediate 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 General Money with a short position of Voya Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Money and Voya Intermediate.
Diversification Opportunities for General Money and Voya Intermediate
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between General and Voya is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding General Money Market and Voya Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Intermediate Bond and General Money 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 General Money Market are associated (or correlated) with Voya Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Intermediate Bond has no effect on the direction of General Money i.e., General Money and Voya Intermediate go up and down completely randomly.
Pair Corralation between General Money and Voya Intermediate
Assuming the 90 days horizon General Money Market is expected to generate 2.05 times more return on investment than Voya Intermediate. However, General Money is 2.05 times more volatile than Voya Intermediate Bond. It trades about 0.02 of its potential returns per unit of risk. Voya Intermediate Bond is currently generating about 0.04 per unit of risk. If you would invest 92.00 in General Money Market on September 12, 2024 and sell it today you would earn a total of 8.00 from holding General Money Market or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
General Money Market vs. Voya Intermediate Bond
Performance |
| Timeline |
| General Money Market |
| Voya Intermediate Bond |
General Money and Voya Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Money and Voya Intermediate
The main advantage of trading using opposite General Money and Voya Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Money position performs unexpectedly, Voya Intermediate 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 Intermediate will offset losses from the drop in Voya Intermediate's long position.| General Money vs. T Rowe Price | General Money vs. Multisector Bond Sma | General Money vs. Ambrus Core Bond | General Money vs. Blrc Sgy Mnp |
| Voya Intermediate vs. Ab High Income | Voya Intermediate vs. Siit High Yield | Voya Intermediate vs. Ab Global Risk | Voya Intermediate vs. Alliancebernstein Global High |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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