Correlation Between Voya Solution and Smallcap Growth
Can any of the company-specific risk be diversified away by investing in both Voya Solution and Smallcap Growth 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 Voya Solution and Smallcap Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Solution Aggressive and Smallcap Growth Fund, you can compare the effects of market volatilities on Voya Solution and Smallcap Growth 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 Voya Solution with a short position of Smallcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Solution and Smallcap Growth.
Diversification Opportunities for Voya Solution and Smallcap Growth
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Voya and Smallcap is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Voya Solution Aggressive and Smallcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap Growth and Voya Solution 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 Voya Solution Aggressive are associated (or correlated) with Smallcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Growth has no effect on the direction of Voya Solution i.e., Voya Solution and Smallcap Growth go up and down completely randomly.
Pair Corralation between Voya Solution and Smallcap Growth
Assuming the 90 days horizon Voya Solution is expected to generate 1.63 times less return on investment than Smallcap Growth. But when comparing it to its historical volatility, Voya Solution Aggressive is 1.67 times less risky than Smallcap Growth. It trades about 0.11 of its potential returns per unit of risk. Smallcap Growth Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,448 in Smallcap Growth Fund on September 12, 2024 and sell it today you would earn a total of 263.00 from holding Smallcap Growth Fund or generate 18.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Solution Aggressive vs. Smallcap Growth Fund
Performance |
| Timeline |
| Voya Solution Aggressive |
| Smallcap Growth |
Voya Solution and Smallcap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Solution and Smallcap Growth
The main advantage of trading using opposite Voya Solution and Smallcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Solution position performs unexpectedly, Smallcap Growth 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 Smallcap Growth will offset losses from the drop in Smallcap Growth's long position.| Voya Solution vs. Smallcap Growth Fund | Voya Solution vs. Aqr Small Cap | Voya Solution vs. Df Dent Small | Voya Solution vs. Ab Small Cap |
| Smallcap Growth vs. Allianzgi Diversified Income | Smallcap Growth vs. Global Diversified Income | Smallcap Growth vs. Aqr Diversified Arbitrage | Smallcap Growth vs. Guggenheim Diversified 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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