Correlation Between Voya Bond and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Vanguard Total 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 Vanguard Total 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 Vanguard Total Bond, you can compare the effects of market volatilities on Voya Bond and Vanguard Total 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 Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Vanguard Total.
Diversification Opportunities for Voya Bond and Vanguard Total
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Voya and Vanguard is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Voya Bond Index and Vanguard Total Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Bond 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 Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Bond has no effect on the direction of Voya Bond i.e., Voya Bond and Vanguard Total go up and down completely randomly.
Pair Corralation between Voya Bond and Vanguard Total
Assuming the 90 days horizon Voya Bond Index is expected to under-perform the Vanguard Total. But the mutual fund apears to be less risky and, when comparing its historical volatility, Voya Bond Index is 1.01 times less risky than Vanguard Total. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Vanguard Total Bond is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 960.00 in Vanguard Total Bond on August 24, 2024 and sell it today you would lose (5.00) from holding Vanguard Total Bond or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Voya Bond Index vs. Vanguard Total Bond
Performance |
| Timeline |
| Voya Bond Index |
| Vanguard Total Bond |
Voya Bond and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Bond and Vanguard Total
The main advantage of trading using opposite Voya Bond and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Vanguard Total 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 Vanguard Total will offset losses from the drop in Vanguard Total's long position.| Voya Bond vs. Ab Government Exchange | Voya Bond vs. Franklin Adjustable Government | Voya Bond vs. Short Term Government Fund | Voya Bond vs. Inverse Government Long |
| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Extended Market | Vanguard Total vs. Vanguard Small Cap Index | Vanguard Total vs. Vanguard Institutional Index |
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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