Correlation Between Voya Bond and Vy Clarion
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Vy Clarion 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 Bond and Vy Clarion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Bond Index and Vy Clarion Global, you can compare the effects of market volatilities on Voya Bond and Vy Clarion 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 Bond with a short position of Vy Clarion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Vy Clarion.
Diversification Opportunities for Voya Bond and Vy Clarion
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and ICRNX is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Voya Bond Index and Vy Clarion Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Clarion Global and Voya Bond 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 Bond Index are associated (or correlated) with Vy Clarion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Clarion Global has no effect on the direction of Voya Bond i.e., Voya Bond and Vy Clarion go up and down completely randomly.
Pair Corralation between Voya Bond and Vy Clarion
Assuming the 90 days horizon Voya Bond Index is expected to generate 0.5 times more return on investment than Vy Clarion. However, Voya Bond Index is 2.02 times less risky than Vy Clarion. It trades about 0.22 of its potential returns per unit of risk. Vy Clarion Global is currently generating about -0.04 per unit of risk. If you would invest 896.00 in Voya Bond Index on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Voya Bond Index or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Voya Bond Index vs. Vy Clarion Global
Performance |
| Timeline |
| Voya Bond Index |
| Vy Clarion Global |
Voya Bond and Vy Clarion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Bond and Vy Clarion
The main advantage of trading using opposite Voya Bond and Vy Clarion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Vy Clarion 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 Vy Clarion will offset losses from the drop in Vy Clarion's long position.| Voya Bond vs. Voya Investors Trust | Voya Bond vs. Voya Vacs Index | Voya Bond vs. Voya Vacs Index | Voya Bond vs. Vy T Rowe |
| Vy Clarion vs. Voya Bond Index | Vy Clarion vs. Voya Bond Index | Vy Clarion vs. Voya Limited Maturity | Vy Clarion 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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