Correlation Between Voya Large and Voya Index
Can any of the company-specific risk be diversified away by investing in both Voya Large and Voya Index 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 Large and Voya Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Large Cap and Voya Index Solution, you can compare the effects of market volatilities on Voya Large and Voya Index 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 Large with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Large and Voya Index.
Diversification Opportunities for Voya Large and Voya Index
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Voya is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Voya Large Cap and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution and Voya Large 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 Large Cap are associated (or correlated) with Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Voya Large i.e., Voya Large and Voya Index go up and down completely randomly.
Pair Corralation between Voya Large and Voya Index
Assuming the 90 days horizon Voya Large is expected to generate 1.0 times less return on investment than Voya Index. In addition to that, Voya Large is 1.47 times more volatile than Voya Index Solution. It trades about 0.08 of its total potential returns per unit of risk. Voya Index Solution is currently generating about 0.12 per unit of volatility. If you would invest 1,139 in Voya Index Solution on September 1, 2024 and sell it today you would earn a total of 96.00 from holding Voya Index Solution or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Large Cap vs. Voya Index Solution
Performance |
| Timeline |
| Voya Large Cap |
| Voya Index Solution |
Voya Large and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Large and Voya Index
The main advantage of trading using opposite Voya Large and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Large position performs unexpectedly, Voya Index 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 Index will offset losses from the drop in Voya Index's long position.| Voya Large vs. Voya Bond Index | Voya Large vs. Voya Bond Index | Voya Large vs. Voya Limited Maturity | Voya Large vs. Voya Limited Maturity |
| Voya Index vs. Voya Bond Index | Voya Index vs. Voya Bond Index | Voya Index vs. Voya Limited Maturity | Voya Index vs. Voya Limited Maturity |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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