Correlation Between Voya Midcap and Voya Stock
Can any of the company-specific risk be diversified away by investing in both Voya Midcap and Voya Stock 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 Stock 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 Stock Index, you can compare the effects of market volatilities on Voya Midcap and Voya Stock 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 Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Midcap and Voya Stock.
Diversification Opportunities for Voya Midcap and Voya Stock
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Voya and Voya is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Voya Midcap Opportunities and Voya Stock Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Stock Index 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 Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Stock Index has no effect on the direction of Voya Midcap i.e., Voya Midcap and Voya Stock go up and down completely randomly.
Pair Corralation between Voya Midcap and Voya Stock
Assuming the 90 days horizon Voya Midcap Opportunities is expected to generate 1.43 times more return on investment than Voya Stock. However, Voya Midcap is 1.43 times more volatile than Voya Stock Index. It trades about 0.31 of its potential returns per unit of risk. Voya Stock Index is currently generating about 0.14 per unit of risk. If you would invest 1,767 in Voya Midcap Opportunities on August 26, 2024 and sell it today you would earn a total of 258.00 from holding Voya Midcap Opportunities or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Midcap Opportunities vs. Voya Stock Index
Performance |
| Timeline |
| Voya Midcap Opportunities |
| Voya Stock Index |
Voya Midcap and Voya Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Midcap and Voya Stock
The main advantage of trading using opposite Voya Midcap and Voya Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Midcap position performs unexpectedly, Voya Stock 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 Stock will offset losses from the drop in Voya Stock's long position.| Voya Midcap vs. Voya Bond Index | Voya Midcap vs. Voya Bond Index | Voya Midcap vs. Voya Limited Maturity | Voya Midcap vs. Voya Limited Maturity |
| Voya Stock vs. Short Precious Metals | Voya Stock vs. Wells Fargo Advantage | Voya Stock vs. James Balanced Golden | Voya Stock vs. Franklin Gold Precious |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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