Correlation Between Voya Bond and Ing Intermediate
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Ing 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 Ing 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 Ing Intermediate Bond, you can compare the effects of market volatilities on Voya Bond and Ing 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 Ing Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Ing Intermediate.
Diversification Opportunities for Voya Bond and Ing Intermediate
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Voya and Ing is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Voya Bond Index and Ing Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ing 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 Ing Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ing Intermediate Bond has no effect on the direction of Voya Bond i.e., Voya Bond and Ing Intermediate go up and down completely randomly.
Pair Corralation between Voya Bond and Ing Intermediate
Assuming the 90 days horizon Voya Bond is expected to generate 1.51 times less return on investment than Ing Intermediate. In addition to that, Voya Bond is 1.07 times more volatile than Ing Intermediate Bond. It trades about 0.05 of its total potential returns per unit of risk. Ing Intermediate Bond is currently generating about 0.08 per unit of volatility. If you would invest 1,012 in Ing Intermediate Bond on August 26, 2024 and sell it today you would earn a total of 69.00 from holding Ing Intermediate Bond or generate 6.82% 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. Ing Intermediate Bond
Performance |
| Timeline |
| Voya Bond Index |
| Ing Intermediate Bond |
Voya Bond and Ing Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Bond and Ing Intermediate
The main advantage of trading using opposite Voya Bond and Ing Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Ing 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 Ing Intermediate will offset losses from the drop in Ing 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 |
| Ing Intermediate vs. Voya Bond Index | Ing Intermediate vs. Voya Bond Index | Ing Intermediate vs. Voya Limited Maturity | Ing 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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