Correlation Between Voya Short and Voya Bond
Can any of the company-specific risk be diversified away by investing in both Voya Short and Voya Bond 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 Short and Voya Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Short Term and Voya Bond Index, you can compare the effects of market volatilities on Voya Short and Voya Bond 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 Short with a short position of Voya Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Short and Voya Bond.
Diversification Opportunities for Voya Short and Voya Bond
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and Voya is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Voya Short Term and Voya Bond Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Bond Index and Voya Short 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 Short Term are associated (or correlated) with Voya Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Bond Index has no effect on the direction of Voya Short i.e., Voya Short and Voya Bond go up and down completely randomly.
Pair Corralation between Voya Short and Voya Bond
Assuming the 90 days horizon Voya Short is expected to generate 1.33 times less return on investment than Voya Bond. But when comparing it to its historical volatility, Voya Short Term is 2.24 times less risky than Voya Bond. It trades about 0.25 of its potential returns per unit of risk. Voya Bond Index is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 902.00 in Voya Bond Index on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Voya Bond Index or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Short Term vs. Voya Bond Index
Performance |
| Timeline |
| Voya Short Term |
| Voya Bond Index |
Voya Short and Voya Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Short and Voya Bond
The main advantage of trading using opposite Voya Short and Voya Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Short position performs unexpectedly, Voya Bond 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 Bond will offset losses from the drop in Voya Bond's long position.| Voya Short vs. Dreyfusstandish Global Fixed | Voya Short vs. Artisan Global Unconstrained | Voya Short vs. Franklin Mutual Global | Voya Short vs. Legg Mason Global |
| Voya Bond vs. Large Cap Growth Profund | Voya Bond vs. Jhancock Disciplined Value | Voya Bond vs. Fidelity Series 1000 | Voya Bond vs. Lord Abbett Affiliated |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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