Correlation Between Voya Bond and Vy(r) T
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Vy(r) T 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) T 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 T Rowe, you can compare the effects of market volatilities on Voya Bond and Vy(r) T 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) T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Vy(r) T.
Diversification Opportunities for Voya Bond and Vy(r) T
Excellent diversification
The 3 months correlation between Voya and Vy(r) is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Voya Bond Index and Vy T Rowe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy T Rowe 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) T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy T Rowe has no effect on the direction of Voya Bond i.e., Voya Bond and Vy(r) T go up and down completely randomly.
Pair Corralation between Voya Bond and Vy(r) T
Assuming the 90 days horizon Voya Bond is expected to generate 4.97 times less return on investment than Vy(r) T. But when comparing it to its historical volatility, Voya Bond Index is 1.23 times less risky than Vy(r) T. It trades about 0.08 of its potential returns per unit of risk. Vy T Rowe is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,851 in Vy T Rowe on September 1, 2024 and sell it today you would earn a total of 97.00 from holding Vy T Rowe or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Bond Index vs. Vy T Rowe
Performance |
| Timeline |
| Voya Bond Index |
| Vy T Rowe |
Voya Bond and Vy(r) T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Bond and Vy(r) T
The main advantage of trading using opposite Voya Bond and Vy(r) T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Vy(r) T 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) T will offset losses from the drop in Vy(r) T's long position.| Voya Bond vs. Voya Bond Index | Voya Bond vs. Voya Bond Index | Voya Bond vs. Voya Limited Maturity | Voya Bond vs. Voya Limited Maturity |
| Vy(r) T vs. John Hancock Money | Vy(r) T vs. T Rowe Price | Vy(r) T vs. American Century Investment | Vy(r) T vs. Lord Abbett Govt |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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