Correlation Between Voya Large and Calvert Developed
Can any of the company-specific risk be diversified away by investing in both Voya Large and Calvert Developed 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 Calvert Developed 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 Calvert Developed Market, you can compare the effects of market volatilities on Voya Large and Calvert Developed 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 Calvert Developed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Large and Calvert Developed.
Diversification Opportunities for Voya Large and Calvert Developed
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Voya and Calvert is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Voya Large Cap and Calvert Developed Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Developed Market 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 Calvert Developed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Developed Market has no effect on the direction of Voya Large i.e., Voya Large and Calvert Developed go up and down completely randomly.
Pair Corralation between Voya Large and Calvert Developed
Assuming the 90 days horizon Voya Large Cap is expected to generate 0.95 times more return on investment than Calvert Developed. However, Voya Large Cap is 1.05 times less risky than Calvert Developed. It trades about 0.27 of its potential returns per unit of risk. Calvert Developed Market is currently generating about 0.25 per unit of risk. If you would invest 599.00 in Voya Large Cap on November 5, 2024 and sell it today you would earn a total of 25.00 from holding Voya Large Cap or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Large Cap vs. Calvert Developed Market
Performance |
| Timeline |
| Voya Large Cap |
| Calvert Developed Market |
Voya Large and Calvert Developed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Large and Calvert Developed
The main advantage of trading using opposite Voya Large and Calvert Developed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Large position performs unexpectedly, Calvert Developed 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 Calvert Developed will offset losses from the drop in Calvert Developed'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 |
| Calvert Developed vs. Calvert Large Cap | Calvert Developed vs. Calvert Large Cap | Calvert Developed vs. Calvert Mid Cap | Calvert Developed vs. Calvert Short Duration |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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