Correlation Between Voya High and Ridgeworth International
Can any of the company-specific risk be diversified away by investing in both Voya High and Ridgeworth International 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 High and Ridgeworth International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya High Yield and Ridgeworth International Equity, you can compare the effects of market volatilities on Voya High and Ridgeworth International 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 High with a short position of Ridgeworth International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Ridgeworth International.
Diversification Opportunities for Voya High and Ridgeworth International
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Voya and Ridgeworth is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Ridgeworth International Equit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ridgeworth International and Voya High 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 High Yield are associated (or correlated) with Ridgeworth International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ridgeworth International has no effect on the direction of Voya High i.e., Voya High and Ridgeworth International go up and down completely randomly.
Pair Corralation between Voya High and Ridgeworth International
Assuming the 90 days horizon Voya High Yield is expected to generate 0.35 times more return on investment than Ridgeworth International. However, Voya High Yield is 2.85 times less risky than Ridgeworth International. It trades about 0.25 of its potential returns per unit of risk. Ridgeworth International Equity is currently generating about -0.07 per unit of risk. If you would invest 688.00 in Voya High Yield on October 20, 2024 and sell it today you would earn a total of 7.00 from holding Voya High Yield or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Voya High Yield vs. Ridgeworth International Equit
Performance |
| Timeline |
| Voya High Yield |
| Ridgeworth International |
Voya High and Ridgeworth International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Ridgeworth International
The main advantage of trading using opposite Voya High and Ridgeworth International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High position performs unexpectedly, Ridgeworth International 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 Ridgeworth International will offset losses from the drop in Ridgeworth International's long position.| Voya High vs. Voya Bond Index | Voya High vs. Voya Bond Index | Voya High vs. Voya Limited Maturity | Voya High 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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