Correlation Between Voya High and Steward Covered
Can any of the company-specific risk be diversified away by investing in both Voya High and Steward Covered 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 Steward Covered 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 Steward Ered Call, you can compare the effects of market volatilities on Voya High and Steward Covered 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 Steward Covered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Steward Covered.
Diversification Opportunities for Voya High and Steward Covered
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Voya and Steward is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Steward Ered Call in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Ered Call 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 Steward Covered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Ered Call has no effect on the direction of Voya High i.e., Voya High and Steward Covered go up and down completely randomly.
Pair Corralation between Voya High and Steward Covered
Assuming the 90 days horizon Voya High Yield is expected to generate 0.36 times more return on investment than Steward Covered. However, Voya High Yield is 2.81 times less risky than Steward Covered. It trades about 0.23 of its potential returns per unit of risk. Steward Ered Call is currently generating about 0.01 per unit of risk. If you would invest 689.00 in Voya High Yield on October 22, 2024 and sell it today you would earn a total of 6.00 from holding Voya High Yield or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya High Yield vs. Steward Ered Call
Performance |
| Timeline |
| Voya High Yield |
| Steward Ered Call |
Voya High and Steward Covered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Steward Covered
The main advantage of trading using opposite Voya High and Steward Covered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High position performs unexpectedly, Steward Covered 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 Steward Covered will offset losses from the drop in Steward Covered's long position.| Voya High vs. Siit Emerging Markets | Voya High vs. Oklahoma College Savings | Voya High vs. Calvert Developed Market | Voya High vs. Franklin Emerging Market |
| Steward Covered vs. Victory Incore Fund | Steward Covered vs. Lord Abbett Diversified | Steward Covered vs. Qs Large Cap | Steward Covered vs. Tax Managed Mid Small |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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