Correlation Between Voya Index and Delaware Emerging
Can any of the company-specific risk be diversified away by investing in both Voya Index and Delaware Emerging 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 Index and Delaware Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Index Solution and Delaware Emerging Markets, you can compare the effects of market volatilities on Voya Index and Delaware Emerging 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 Index with a short position of Delaware Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Delaware Emerging.
Diversification Opportunities for Voya Index and Delaware Emerging
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Delaware is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Solution and Delaware Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Emerging Markets and Voya Index 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 Index Solution are associated (or correlated) with Delaware Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Emerging Markets has no effect on the direction of Voya Index i.e., Voya Index and Delaware Emerging go up and down completely randomly.
Pair Corralation between Voya Index and Delaware Emerging
Assuming the 90 days horizon Voya Index Solution is expected to generate 4.33 times more return on investment than Delaware Emerging. However, Voya Index is 4.33 times more volatile than Delaware Emerging Markets. It trades about 0.06 of its potential returns per unit of risk. Delaware Emerging Markets is currently generating about 0.11 per unit of risk. If you would invest 1,648 in Voya Index Solution on October 27, 2024 and sell it today you would earn a total of 369.00 from holding Voya Index Solution or generate 22.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Index Solution vs. Delaware Emerging Markets
Performance |
| Timeline |
| Voya Index Solution |
| Delaware Emerging Markets |
Voya Index and Delaware Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Delaware Emerging
The main advantage of trading using opposite Voya Index and Delaware Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index position performs unexpectedly, Delaware Emerging 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 Delaware Emerging will offset losses from the drop in Delaware Emerging's long position.| Voya Index vs. Voya Bond Index | Voya Index vs. Voya Bond Index | Voya Index vs. Voya Limited Maturity | Voya Index vs. Voya Limited Maturity |
| Delaware Emerging vs. Health Care Ultrasector | Delaware Emerging vs. Baillie Gifford Health | Delaware Emerging vs. Fidelity Advisor Health | Delaware Emerging vs. Invesco Global Health |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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