Correlation Between Voya High and Voya Large-cap
Can any of the company-specific risk be diversified away by investing in both Voya High and Voya Large-cap 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 Voya Large-cap 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 Voya Large Cap Growth, you can compare the effects of market volatilities on Voya High and Voya Large-cap 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 Voya Large-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Voya Large-cap.
Diversification Opportunities for Voya High and Voya Large-cap
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Voya is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Voya Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap 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 Voya Large-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Voya High i.e., Voya High and Voya Large-cap go up and down completely randomly.
Pair Corralation between Voya High and Voya Large-cap
Assuming the 90 days horizon Voya High is expected to generate 3.78 times less return on investment than Voya Large-cap. But when comparing it to its historical volatility, Voya High Yield is 5.96 times less risky than Voya Large-cap. It trades about 0.15 of its potential returns per unit of risk. Voya Large Cap Growth is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,748 in Voya Large Cap Growth on November 9, 2024 and sell it today you would earn a total of 1,543 from holding Voya Large Cap Growth or generate 32.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya High Yield vs. Voya Large Cap Growth
Performance |
| Timeline |
| Voya High Yield |
| Voya Large Cap |
Voya High and Voya Large-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Voya Large-cap
The main advantage of trading using opposite Voya High and Voya Large-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High position performs unexpectedly, Voya Large-cap 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 Voya Large-cap will offset losses from the drop in Voya Large-cap's long position.| Voya High vs. Aqr Managed Futures | Voya High vs. Ab Bond Inflation | Voya High vs. Simt Multi Asset Inflation | Voya High vs. Lord Abbett Inflation |
| Voya Large-cap vs. Siit High Yield | Voya Large-cap vs. Voya High Yield | Voya Large-cap vs. Payden High Income | Voya Large-cap vs. Neuberger Berman Income |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |