Correlation Between Voya Bond and Voya Securitized
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Voya Securitized 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 Securitized 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 Securitized Credit, you can compare the effects of market volatilities on Voya Bond and Voya Securitized 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 Securitized. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Voya Securitized.
Diversification Opportunities for Voya Bond and Voya Securitized
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Voya and Voya is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Voya Bond Index and Voya Securitized Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Securitized Credit 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 Securitized. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Securitized Credit has no effect on the direction of Voya Bond i.e., Voya Bond and Voya Securitized go up and down completely randomly.
Pair Corralation between Voya Bond and Voya Securitized
Assuming the 90 days horizon Voya Bond Index is expected to under-perform the Voya Securitized. In addition to that, Voya Bond is 1.79 times more volatile than Voya Securitized Credit. It trades about -0.06 of its total potential returns per unit of risk. Voya Securitized Credit is currently generating about 0.11 per unit of volatility. If you would invest 940.00 in Voya Securitized Credit on August 26, 2024 and sell it today you would earn a total of 4.00 from holding Voya Securitized Credit or generate 0.43% 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 Securitized Credit
Performance |
| Timeline |
| Voya Bond Index |
| Voya Securitized Credit |
Voya Bond and Voya Securitized Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Bond and Voya Securitized
The main advantage of trading using opposite Voya Bond and Voya Securitized positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Voya Securitized 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 Securitized will offset losses from the drop in Voya Securitized'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 Securitized vs. Voya Bond Index | Voya Securitized vs. Voya Bond Index | Voya Securitized vs. Voya Limited Maturity | Voya Securitized 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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