Correlation Between Small Cap and Voya Solution
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Voya Solution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Equity and Voya Solution 2060, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Voya Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Voya Solution.
Diversification Opportunities for Small Cap and Voya Solution
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Small and Voya is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Equity 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 Small Cap 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 Small Cap Equity 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 Small Cap i.e., Small Cap and Voya Solution go up and down completely randomly.
Pair Corralation between Small Cap and Voya Solution
Assuming the 90 days horizon Small Cap Equity is expected to generate 2.04 times more return on investment than Voya Solution. However, Small Cap is 2.04 times more volatile than Voya Solution 2060. It trades about 0.17 of its potential returns per unit of risk. Voya Solution 2060 is currently generating about 0.16 per unit of risk. If you would invest 1,797 in Small Cap Equity on September 4, 2024 and sell it today you would earn a total of 242.00 from holding Small Cap Equity or generate 13.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Equity vs. Voya Solution 2060
Performance |
| Timeline |
| Small Cap Equity |
| Voya Solution 2060 |
Small Cap and Voya Solution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Voya Solution
The main advantage of trading using opposite Small Cap and Voya Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. Firsthand Alternative Energy | Small Cap vs. Salient Mlp Energy | Small Cap vs. Tortoise Energy Independence | Small Cap vs. Goehring Rozencwajg Resources |
| Voya Solution vs. Small Cap Equity | Voya Solution vs. Calamos Global Equity | Voya Solution vs. Balanced Fund Retail | Voya Solution vs. Ultra Short Fixed Income |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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