Correlation Between Voya International and Voya Vacs
Can any of the company-specific risk be diversified away by investing in both Voya International and Voya Vacs 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 International and Voya Vacs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya International Index and Voya Vacs Index, you can compare the effects of market volatilities on Voya International and Voya Vacs 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 International with a short position of Voya Vacs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya International and Voya Vacs.
Diversification Opportunities for Voya International and Voya Vacs
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Voya and Voya is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Voya International Index and Voya Vacs Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Vacs Index and Voya International 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 International Index are associated (or correlated) with Voya Vacs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Vacs Index has no effect on the direction of Voya International i.e., Voya International and Voya Vacs go up and down completely randomly.
Pair Corralation between Voya International and Voya Vacs
Assuming the 90 days horizon Voya International Index is expected to generate 1.01 times more return on investment than Voya Vacs. However, Voya International is 1.01 times more volatile than Voya Vacs Index. It trades about 0.04 of its potential returns per unit of risk. Voya Vacs Index is currently generating about 0.04 per unit of risk. If you would invest 1,039 in Voya International Index on September 12, 2024 and sell it today you would earn a total of 114.00 from holding Voya International Index or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya International Index vs. Voya Vacs Index
Performance |
| Timeline |
| Voya International Index |
| Voya Vacs Index |
Voya International and Voya Vacs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya International and Voya Vacs
The main advantage of trading using opposite Voya International and Voya Vacs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya International position performs unexpectedly, Voya Vacs 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 Vacs will offset losses from the drop in Voya Vacs' long position.| Voya International vs. T Rowe Price | Voya International vs. Needham Aggressive Growth | Voya International vs. Western Asset High | Voya International vs. Lgm Risk Managed |
| Voya Vacs vs. SCOR PK | Voya Vacs vs. Morningstar Unconstrained Allocation | Voya Vacs vs. Via Renewables | Voya Vacs vs. Bondbloxx ETF Trust |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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