Correlation Between Voya Bond and Vy(r) Templeton
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Vy(r) Templeton 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 Vy(r) Templeton 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 Vy Templeton Foreign, you can compare the effects of market volatilities on Voya Bond and Vy(r) Templeton 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 Vy(r) Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Vy(r) Templeton.
Diversification Opportunities for Voya Bond and Vy(r) Templeton
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and Vy(r) is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Voya Bond Index and Vy Templeton Foreign in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Templeton Foreign 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 Vy(r) Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Templeton Foreign has no effect on the direction of Voya Bond i.e., Voya Bond and Vy(r) Templeton go up and down completely randomly.
Pair Corralation between Voya Bond and Vy(r) Templeton
Assuming the 90 days horizon Voya Bond Index is expected to generate 0.46 times more return on investment than Vy(r) Templeton. However, Voya Bond Index is 2.18 times less risky than Vy(r) Templeton. It trades about -0.07 of its potential returns per unit of risk. Vy Templeton Foreign is currently generating about -0.07 per unit of risk. If you would invest 906.00 in Voya Bond Index on August 24, 2024 and sell it today you would lose (5.00) from holding Voya Bond Index or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Bond Index vs. Vy Templeton Foreign
Performance |
| Timeline |
| Voya Bond Index |
| Vy Templeton Foreign |
Voya Bond and Vy(r) Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Bond and Vy(r) Templeton
The main advantage of trading using opposite Voya Bond and Vy(r) Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Vy(r) Templeton 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 Vy(r) Templeton will offset losses from the drop in Vy(r) Templeton's long position.| Voya Bond vs. Pnc Emerging Markets | Voya Bond vs. Legg Mason Partners | Voya Bond vs. Ep Emerging Markets | Voya Bond vs. Extended Market Index |
| Vy(r) Templeton vs. Quantitative U S | Vy(r) Templeton vs. Old Westbury Large | Vy(r) Templeton vs. Nuveen Winslow Large Cap | Vy(r) Templeton vs. Qs 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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