Correlation Between Voya Bond and Voya Target
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Voya Target 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 Target 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 Target Retirement, you can compare the effects of market volatilities on Voya Bond and Voya Target 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 Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Voya Target.
Diversification Opportunities for Voya Bond and Voya Target
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Voya and Voya is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Voya Bond Index and Voya Target Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Target Retirement 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 Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Target Retirement has no effect on the direction of Voya Bond i.e., Voya Bond and Voya Target go up and down completely randomly.
Pair Corralation between Voya Bond and Voya Target
Assuming the 90 days horizon Voya Bond Index is expected to under-perform the Voya Target. But the mutual fund apears to be less risky and, when comparing its historical volatility, Voya Bond Index is 1.9 times less risky than Voya Target. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Voya Target Retirement is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,344 in Voya Target Retirement on August 28, 2024 and sell it today you would earn a total of 53.00 from holding Voya Target Retirement or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Bond Index vs. Voya Target Retirement
Performance |
| Timeline |
| Voya Bond Index |
| Voya Target Retirement |
Voya Bond and Voya Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Bond and Voya Target
The main advantage of trading using opposite Voya Bond and Voya Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Voya Target 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 Target will offset losses from the drop in Voya Target's long position.| Voya Bond vs. Voya Limited Maturity | Voya Bond vs. Voya Limited Maturity | Voya Bond vs. Voya Limited Maturity | Voya Bond vs. Voya Emerging Markets |
| Voya Target vs. Voya Bond Index | Voya Target vs. Voya Bond Index | Voya Target vs. Voya Limited Maturity | Voya Target 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |