Correlation Between Voya Intermediate and Voya Bond
Can any of the company-specific risk be diversified away by investing in both Voya Intermediate 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 Intermediate 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 Intermediate Bond and Voya Bond Index, you can compare the effects of market volatilities on Voya Intermediate 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 Intermediate with a short position of Voya Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Intermediate and Voya Bond.
Diversification Opportunities for Voya Intermediate and Voya Bond
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Voya and Voya is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Voya Intermediate Bond 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 Intermediate 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 Intermediate Bond 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 Intermediate i.e., Voya Intermediate and Voya Bond go up and down completely randomly.
Pair Corralation between Voya Intermediate and Voya Bond
Assuming the 90 days horizon Voya Intermediate Bond is expected to generate 0.98 times more return on investment than Voya Bond. However, Voya Intermediate Bond is 1.02 times less risky than Voya Bond. It trades about 0.03 of its potential returns per unit of risk. Voya Bond Index is currently generating about 0.01 per unit of risk. If you would invest 845.00 in Voya Intermediate Bond on August 25, 2024 and sell it today you would earn a total of 21.00 from holding Voya Intermediate Bond or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Intermediate Bond vs. Voya Bond Index
Performance |
| Timeline |
| Voya Intermediate Bond |
| Voya Bond Index |
Voya Intermediate and Voya Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Intermediate and Voya Bond
The main advantage of trading using opposite Voya Intermediate and Voya Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Intermediate 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 Intermediate vs. Voya Bond Index | Voya Intermediate vs. Voya Bond Index | Voya Intermediate vs. Voya Limited Maturity | Voya Intermediate vs. Voya Limited Maturity |
| Voya Bond vs. Voya Bond Index | Voya Bond vs. Voya Limited Maturity | Voya Bond vs. Voya Limited Maturity | Voya Bond vs. Voya Bond Index |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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