Correlation Between Voya Bond and Voya Investment
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Voya Investment 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 Investment 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 Investment Grade, you can compare the effects of market volatilities on Voya Bond and Voya Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Voya Investment.
Diversification Opportunities for Voya Bond and Voya Investment
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Voya and Voya is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Voya Bond Index and Voya Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Investment Grade 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Investment Grade has no effect on the direction of Voya Bond i.e., Voya Bond and Voya Investment go up and down completely randomly.
Pair Corralation between Voya Bond and Voya Investment
Assuming the 90 days horizon Voya Bond Index is expected to generate about the same return on investment as Voya Investment Grade. But, Voya Bond Index is 1.18 times less risky than Voya Investment. It trades about 0.04 of its potential returns per unit of risk. Voya Investment Grade is currently generating about 0.03 per unit of risk. If you would invest 908.00 in Voya Investment Grade on November 3, 2024 and sell it today you would earn a total of 2.00 from holding Voya Investment Grade or generate 0.22% 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 Investment Grade
Performance |
| Timeline |
| Voya Bond Index |
| Voya Investment Grade |
Voya Bond and Voya Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Bond and Voya Investment
The main advantage of trading using opposite Voya Bond and Voya Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Voya Investment 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 Investment will offset losses from the drop in Voya Investment's long position.| Voya Bond vs. Massmutual Premier High | Voya Bond vs. T Rowe Price | Voya Bond vs. Ultra Short Fixed Income | Voya Bond vs. Multisector Bond Sma |
| Voya Investment vs. Avantis Large Cap | Voya Investment vs. Virtus Nfj Large Cap | Voya Investment vs. Qs Large Cap | Voya Investment vs. Blackrock Large Cap |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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