Correlation Between Voya High and Intermediate Term
Can any of the company-specific risk be diversified away by investing in both Voya High and Intermediate Term 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 Intermediate Term 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 Intermediate Term Tax Free Bond, you can compare the effects of market volatilities on Voya High and Intermediate Term 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 Intermediate Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Intermediate Term.
Diversification Opportunities for Voya High and Intermediate Term
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Voya and Intermediate is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Intermediate Term Tax Free Bon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Term Tax 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 Intermediate Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Term Tax has no effect on the direction of Voya High i.e., Voya High and Intermediate Term go up and down completely randomly.
Pair Corralation between Voya High and Intermediate Term
Assuming the 90 days horizon Voya High Yield is expected to generate 1.51 times more return on investment than Intermediate Term. However, Voya High is 1.51 times more volatile than Intermediate Term Tax Free Bond. It trades about 0.11 of its potential returns per unit of risk. Intermediate Term Tax Free Bond is currently generating about 0.06 per unit of risk. If you would invest 597.00 in Voya High Yield on September 14, 2024 and sell it today you would earn a total of 104.00 from holding Voya High Yield or generate 17.42% 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. Intermediate Term Tax Free Bon
Performance |
| Timeline |
| Voya High Yield |
| Intermediate Term Tax |
Voya High and Intermediate Term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Intermediate Term
The main advantage of trading using opposite Voya High and Intermediate Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High position performs unexpectedly, Intermediate Term 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 Intermediate Term will offset losses from the drop in Intermediate Term'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 |
| Intermediate Term vs. Janus High Yield Fund | Intermediate Term vs. Siit High Yield | Intermediate Term vs. Voya High Yield | Intermediate Term vs. Prudential High Yield |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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