Correlation Between International Investors and Voya Target
Can any of the company-specific risk be diversified away by investing in both International Investors and Voya Target 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 International Investors and Voya Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and Voya Target Retirement, you can compare the effects of market volatilities on International Investors and Voya Target 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 International Investors with a short position of Voya Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Voya Target.
Diversification Opportunities for International Investors and Voya Target
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and Voya is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Voya Target Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Target Retirement and International Investors 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 International Investors Gold are associated (or correlated) with Voya Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Target Retirement has no effect on the direction of International Investors i.e., International Investors and Voya Target go up and down completely randomly.
Pair Corralation between International Investors and Voya Target
Assuming the 90 days horizon International Investors Gold is expected to generate 2.01 times more return on investment than Voya Target. However, International Investors is 2.01 times more volatile than Voya Target Retirement. It trades about 0.38 of its potential returns per unit of risk. Voya Target Retirement is currently generating about 0.2 per unit of risk. If you would invest 834.00 in International Investors Gold on November 1, 2024 and sell it today you would earn a total of 89.00 from holding International Investors Gold or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
International Investors Gold vs. Voya Target Retirement
Performance |
| Timeline |
| International Investors |
| Voya Target Retirement |
International Investors and Voya Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Voya Target
The main advantage of trading using opposite International Investors and Voya Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors position performs unexpectedly, Voya Target 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 Target will offset losses from the drop in Voya Target's long position.The idea behind International Investors Gold and Voya Target Retirement pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Voya Target vs. International Investors Gold | Voya Target vs. Deutsche Gold Precious | Voya Target vs. Wells Fargo Advantage | Voya Target vs. Goldman Sachs Strategic |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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