Correlation Between Voya Midcap and Vanguard High-yield
Can any of the company-specific risk be diversified away by investing in both Voya Midcap and Vanguard High-yield 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 Vanguard High-yield 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 Vanguard High Yield Tax Exempt, you can compare the effects of market volatilities on Voya Midcap and Vanguard High-yield 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 Vanguard High-yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Midcap and Vanguard High-yield.
Diversification Opportunities for Voya Midcap and Vanguard High-yield
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Vanguard is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Voya Midcap Opportunities and Vanguard High Yield Tax Exempt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard High Yield 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 Vanguard High-yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard High Yield has no effect on the direction of Voya Midcap i.e., Voya Midcap and Vanguard High-yield go up and down completely randomly.
Pair Corralation between Voya Midcap and Vanguard High-yield
Assuming the 90 days horizon Voya Midcap Opportunities is expected to under-perform the Vanguard High-yield. In addition to that, Voya Midcap is 5.67 times more volatile than Vanguard High Yield Tax Exempt. It trades about -0.16 of its total potential returns per unit of risk. Vanguard High Yield Tax Exempt is currently generating about 0.18 per unit of volatility. If you would invest 1,063 in Vanguard High Yield Tax Exempt on November 28, 2024 and sell it today you would earn a total of 10.00 from holding Vanguard High Yield Tax Exempt or generate 0.94% 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. Vanguard High Yield Tax Exempt
Performance |
| Timeline |
| Voya Midcap Opportunities |
| Vanguard High Yield |
Voya Midcap and Vanguard High-yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Midcap and Vanguard High-yield
The main advantage of trading using opposite Voya Midcap and Vanguard High-yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Midcap position performs unexpectedly, Vanguard High-yield 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 Vanguard High-yield will offset losses from the drop in Vanguard High-yield's long position.| Voya Midcap vs. Franklin Natural Resources | Voya Midcap vs. Blackrock All Cap Energy | Voya Midcap vs. Transamerica Mlp Energy | Voya Midcap vs. Short Oil Gas |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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