Correlation Between Voya Midcap and Voya Index
Can any of the company-specific risk be diversified away by investing in both Voya Midcap and Voya Index 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 Index 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 Index Solution, you can compare the effects of market volatilities on Voya Midcap and Voya Index 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 Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Midcap and Voya Index.
Diversification Opportunities for Voya Midcap and Voya Index
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Voya is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Voya Midcap Opportunities and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution 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 Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Voya Midcap i.e., Voya Midcap and Voya Index go up and down completely randomly.
Pair Corralation between Voya Midcap and Voya Index
Assuming the 90 days horizon Voya Midcap Opportunities is expected to generate 1.67 times more return on investment than Voya Index. However, Voya Midcap is 1.67 times more volatile than Voya Index Solution. It trades about 0.08 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.09 per unit of risk. If you would invest 2,046 in Voya Midcap Opportunities on August 30, 2024 and sell it today you would earn a total of 942.00 from holding Voya Midcap Opportunities or generate 46.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Midcap Opportunities vs. Voya Index Solution
Performance |
| Timeline |
| Voya Midcap Opportunities |
| Voya Index Solution |
Voya Midcap and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Midcap and Voya Index
The main advantage of trading using opposite Voya Midcap and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Midcap position performs unexpectedly, Voya Index 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 Index will offset losses from the drop in Voya Index's long position.| Voya Midcap vs. Goldman Sachs Mlp | Voya Midcap vs. Jennison Natural Resources | Voya Midcap vs. Energy Services Fund | Voya Midcap vs. Gamco Natural Resources |
| Voya Index vs. Tekla Healthcare Opportunities | Voya Index vs. Alphacentric Lifesci Healthcare | Voya Index vs. Live Oak Health | Voya Index vs. Baron Health Care |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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