Correlation Between Voya Bond and Voya Solution
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Voya Solution 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 Solution 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 Solution Income, you can compare the effects of market volatilities on Voya Bond and Voya Solution 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 Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Voya Solution.
Diversification Opportunities for Voya Bond and Voya Solution
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Voya and Voya is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Voya Bond Index and Voya Solution Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Solution Income 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 Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Solution Income has no effect on the direction of Voya Bond i.e., Voya Bond and Voya Solution go up and down completely randomly.
Pair Corralation between Voya Bond and Voya Solution
Assuming the 90 days horizon Voya Bond is expected to generate 2.52 times less return on investment than Voya Solution. In addition to that, Voya Bond is 1.31 times more volatile than Voya Solution Income. It trades about 0.08 of its total potential returns per unit of risk. Voya Solution Income is currently generating about 0.27 per unit of volatility. If you would invest 1,043 in Voya Solution Income on September 1, 2024 and sell it today you would earn a total of 17.00 from holding Voya Solution Income or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Voya Bond Index vs. Voya Solution Income
Performance |
| Timeline |
| Voya Bond Index |
| Voya Solution Income |
Voya Bond and Voya Solution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Bond and Voya Solution
The main advantage of trading using opposite Voya Bond and Voya Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Voya Solution 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 Solution will offset losses from the drop in Voya Solution'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 Solution vs. Voya Bond Index | Voya Solution vs. Voya Bond Index | Voya Solution vs. Voya Limited Maturity | Voya Solution 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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