Correlation Between Voya High and State Farm
Can any of the company-specific risk be diversified away by investing in both Voya High and State Farm 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 State Farm 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 State Farm International, you can compare the effects of market volatilities on Voya High and State Farm 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 State Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and State Farm.
Diversification Opportunities for Voya High and State Farm
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Voya and State is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and State Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Farm 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 State Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Farm International has no effect on the direction of Voya High i.e., Voya High and State Farm go up and down completely randomly.
Pair Corralation between Voya High and State Farm
Assuming the 90 days horizon Voya High is expected to generate 1.19 times less return on investment than State Farm. But when comparing it to its historical volatility, Voya High Yield is 2.43 times less risky than State Farm. It trades about 0.15 of its potential returns per unit of risk. State Farm International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,542 in State Farm International on September 14, 2024 and sell it today you would earn a total of 135.00 from holding State Farm International or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Voya High Yield vs. State Farm International
Performance |
| Timeline |
| Voya High Yield |
| State Farm International |
Voya High and State Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and State Farm
The main advantage of trading using opposite Voya High and State Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High position performs unexpectedly, State Farm 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 State Farm will offset losses from the drop in State Farm's long position.| Voya High vs. Bbh Intermediate Municipal | Voya High vs. Gamco Global Telecommunications | Voya High vs. Franklin High Yield | Voya High vs. T Rowe Price |
| State Farm vs. Vy Columbia Small | State Farm vs. Smallcap Growth Fund | State Farm vs. Lebenthal Lisanti Small | State Farm vs. Mutual Of America |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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