Correlation Between Voya Bond and Voya Intermediate
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Voya Intermediate 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 Voya Intermediate 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 Voya Intermediate Bond, you can compare the effects of market volatilities on Voya Bond and Voya Intermediate 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 Voya Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Voya Intermediate.
Diversification Opportunities for Voya Bond and Voya Intermediate
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 Bond Index and Voya Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Intermediate Bond 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 Voya Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Intermediate Bond has no effect on the direction of Voya Bond i.e., Voya Bond and Voya Intermediate go up and down completely randomly.
Pair Corralation between Voya Bond and Voya Intermediate
Assuming the 90 days horizon Voya Bond is expected to generate 1.64 times less return on investment than Voya Intermediate. In addition to that, Voya Bond is 1.05 times more volatile than Voya Intermediate Bond. It trades about 0.02 of its total potential returns per unit of risk. Voya Intermediate Bond is currently generating about 0.04 per unit of volatility. If you would invest 992.00 in Voya Intermediate Bond on August 25, 2024 and sell it today you would earn a total of 76.00 from holding Voya Intermediate Bond or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Bond Index vs. Voya Intermediate Bond
Performance |
| Timeline |
| Voya Bond Index |
| Voya Intermediate Bond |
Voya Bond and Voya Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Bond and Voya Intermediate
The main advantage of trading using opposite Voya Bond and Voya Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Voya Intermediate 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 Intermediate will offset losses from the drop in Voya Intermediate's long position.| Voya Bond vs. Voya Bond Index | Voya Bond vs. Voya Limited Maturity | Voya Bond vs. Voya Limited Maturity | Voya Bond vs. Voya Bond Index |
| Voya Intermediate vs. Voya Bond Index | Voya Intermediate vs. Voya Bond Index | Voya Intermediate vs. Voya Limited Maturity | Voya Intermediate vs. Voya Limited Maturity |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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