Correlation Between Voya Midcap and Voya Large-cap

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Can any of the company-specific risk be diversified away by investing in both Voya Midcap and Voya Large-cap 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 Midcap and Voya Large-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Midcap Opportunities and Voya Large Cap Growth, you can compare the effects of market volatilities on Voya Midcap and Voya Large-cap 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 Midcap with a short position of Voya Large-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Midcap and Voya Large-cap.

Diversification Opportunities for Voya Midcap and Voya Large-cap

VoyaVoyaDiversified AwayVoyaVoyaDiversified Away100%
0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Voya and Voya is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Voya Midcap Opportunities and Voya Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap and Voya Midcap 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 Midcap Opportunities are associated (or correlated) with Voya Large-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Voya Midcap i.e., Voya Midcap and Voya Large-cap go up and down completely randomly.

Pair Corralation between Voya Midcap and Voya Large-cap

Assuming the 90 days horizon Voya Midcap Opportunities is expected to under-perform the Voya Large-cap. But the mutual fund apears to be less risky and, when comparing its historical volatility, Voya Midcap Opportunities is 1.03 times less risky than Voya Large-cap. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Voya Large Cap Growth is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  6,226  in Voya Large Cap Growth on November 26, 2024 and sell it today you would lose (103.00) from holding Voya Large Cap Growth or give up 1.65% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Voya Midcap Opportunities  vs.  Voya Large Cap Growth

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -4-202468
JavaScript chart by amCharts 3.21.15IMOPX VGOSX
       Timeline  
Voya Midcap Opportunities 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Voya Midcap Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Voya Midcap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3.73.753.83.853.93.9544.05
Voya Large Cap 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Voya Large Cap Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Voya Large-cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb606162636465

Voya Midcap and Voya Large-cap Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.27-3.2-2.13-1.050.01.072.153.224.29 0.050.100.150.20
JavaScript chart by amCharts 3.21.15IMOPX VGOSX
       Returns  

Pair Trading with Voya Midcap and Voya Large-cap

The main advantage of trading using opposite Voya Midcap and Voya Large-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Midcap position performs unexpectedly, Voya Large-cap 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 Large-cap will offset losses from the drop in Voya Large-cap's long position.
The idea behind Voya Midcap Opportunities and Voya Large Cap Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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