Correlation Between Voya Limited and Voya Bond
Can any of the company-specific risk be diversified away by investing in both Voya Limited and Voya Bond 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 Limited and Voya Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Limited Maturity and Voya Bond Index, you can compare the effects of market volatilities on Voya Limited and Voya Bond 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 Limited with a short position of Voya Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Limited and Voya Bond.
Diversification Opportunities for Voya Limited and Voya Bond
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Voya is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Voya Limited Maturity and Voya Bond Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Bond Index and Voya Limited 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 Limited Maturity are associated (or correlated) with Voya Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Bond Index has no effect on the direction of Voya Limited i.e., Voya Limited and Voya Bond go up and down completely randomly.
Pair Corralation between Voya Limited and Voya Bond
Assuming the 90 days horizon Voya Limited Maturity is expected to generate 0.38 times more return on investment than Voya Bond. However, Voya Limited Maturity is 2.62 times less risky than Voya Bond. It trades about 0.1 of its potential returns per unit of risk. Voya Bond Index is currently generating about 0.03 per unit of risk. If you would invest 865.00 in Voya Limited Maturity on September 1, 2024 and sell it today you would earn a total of 66.00 from holding Voya Limited Maturity or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Limited Maturity vs. Voya Bond Index
Performance |
| Timeline |
| Voya Limited Maturity |
| Voya Bond Index |
Voya Limited and Voya Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Limited and Voya Bond
The main advantage of trading using opposite Voya Limited and Voya Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Limited position performs unexpectedly, Voya Bond 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 Bond will offset losses from the drop in Voya Bond's long position.| Voya Limited vs. Voya Bond Index | Voya Limited vs. Voya Bond Index | Voya Limited vs. Voya Limited Maturity | Voya Limited vs. Voya Bond Index |
| Voya Bond vs. Voya Bond Index | Voya Bond vs. Voya Bond Index | Voya Bond vs. Voya Limited Maturity | Voya Bond 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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