Correlation Between Voya International and Voya Solution
Can any of the company-specific risk be diversified away by investing in both Voya International and Voya Solution 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 Solution 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 Solution Balanced, you can compare the effects of market volatilities on Voya International and Voya Solution 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 Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya International and Voya Solution.
Diversification Opportunities for Voya International and Voya Solution
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Voya and Voya is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Voya International Index and Voya Solution Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Solution Balanced 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 Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Solution Balanced has no effect on the direction of Voya International i.e., Voya International and Voya Solution go up and down completely randomly.
Pair Corralation between Voya International and Voya Solution
Assuming the 90 days horizon Voya International Index is expected to under-perform the Voya Solution. In addition to that, Voya International is 1.65 times more volatile than Voya Solution Balanced. It trades about -0.18 of its total potential returns per unit of risk. Voya Solution Balanced is currently generating about 0.16 per unit of volatility. If you would invest 983.00 in Voya Solution Balanced on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Voya Solution Balanced or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya International Index vs. Voya Solution Balanced
Performance |
| Timeline |
| Voya International Index |
| Voya Solution Balanced |
Voya International and Voya Solution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya International and Voya Solution
The main advantage of trading using opposite Voya International and Voya Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya International position performs unexpectedly, Voya Solution 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 Solution will offset losses from the drop in Voya Solution's long position.| Voya International vs. Voya Bond Index | Voya International vs. Voya Bond Index | Voya International vs. Voya Limited Maturity | Voya International vs. Voya Limited Maturity |
| Voya Solution vs. T Rowe Price | Voya Solution vs. Metropolitan West Porate | Voya Solution vs. Alliancebernstein National Municipal | Voya Solution vs. Artisan High 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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