Correlation Between Voya Bond and Voya Retirement
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Voya Retirement 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 Retirement 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 Retirement Moderate, you can compare the effects of market volatilities on Voya Bond and Voya Retirement 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 Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Voya Retirement.
Diversification Opportunities for Voya Bond and Voya Retirement
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and VOYA is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Voya Bond Index and Voya Retirement Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Retirement Moderate 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 Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Retirement Moderate has no effect on the direction of Voya Bond i.e., Voya Bond and Voya Retirement go up and down completely randomly.
Pair Corralation between Voya Bond and Voya Retirement
Assuming the 90 days horizon Voya Bond is expected to generate 1.79 times less return on investment than Voya Retirement. But when comparing it to its historical volatility, Voya Bond Index is 1.38 times less risky than Voya Retirement. It trades about 0.06 of its potential returns per unit of risk. Voya Retirement Moderate is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 998.00 in Voya Retirement Moderate on October 25, 2024 and sell it today you would earn a total of 6.00 from holding Voya Retirement Moderate or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Bond Index vs. Voya Retirement Moderate
Performance |
| Timeline |
| Voya Bond Index |
| Voya Retirement Moderate |
Voya Bond and Voya Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Bond and Voya Retirement
The main advantage of trading using opposite Voya Bond and Voya Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Voya Retirement 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 Retirement will offset losses from the drop in Voya Retirement's long position.| Voya Bond vs. Prudential Real Estate | Voya Bond vs. Fidelity Real Estate | Voya Bond vs. Simt Real Estate | Voya Bond vs. Rreef Property Trust |
| Voya Retirement vs. T Rowe Price | Voya Retirement vs. T Rowe Price | Voya Retirement vs. Versatile Bond Portfolio | Voya Retirement vs. Intermediate Term Tax Free Bond |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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