Correlation Between Voya Bond and Voya Multi-manager
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Voya Multi-manager 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 Multi-manager 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 Multi Manager International, you can compare the effects of market volatilities on Voya Bond and Voya Multi-manager 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 Multi-manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Voya Multi-manager.
Diversification Opportunities for Voya Bond and Voya Multi-manager
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Voya and Voya is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Voya Bond Index and Voya Multi Manager Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Multi Manager 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 Multi-manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Multi Manager has no effect on the direction of Voya Bond i.e., Voya Bond and Voya Multi-manager go up and down completely randomly.
Pair Corralation between Voya Bond and Voya Multi-manager
Assuming the 90 days horizon Voya Bond is expected to generate 3.28 times less return on investment than Voya Multi-manager. But when comparing it to its historical volatility, Voya Bond Index is 2.27 times less risky than Voya Multi-manager. It trades about 0.04 of its potential returns per unit of risk. Voya Multi Manager International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,391 in Voya Multi Manager International on August 27, 2024 and sell it today you would earn a total of 662.00 from holding Voya Multi Manager International or generate 12.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Bond Index vs. Voya Multi Manager Internation
Performance |
| Timeline |
| Voya Bond Index |
| Voya Multi Manager |
Voya Bond and Voya Multi-manager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Bond and Voya Multi-manager
The main advantage of trading using opposite Voya Bond and Voya Multi-manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Voya Multi-manager 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 Multi-manager will offset losses from the drop in Voya Multi-manager'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 Multi-manager vs. Voya Bond Index | Voya Multi-manager vs. Voya Bond Index | Voya Multi-manager vs. Voya Limited Maturity | Voya Multi-manager 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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