Correlation Between Voya Large and Voya Target
Can any of the company-specific risk be diversified away by investing in both Voya Large and Voya Target 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 Target 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 Target Retirement, you can compare the effects of market volatilities on Voya Large and Voya Target 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 Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Large and Voya Target.
Diversification Opportunities for Voya Large and Voya Target
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 Target Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Target Retirement 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 Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Target Retirement has no effect on the direction of Voya Large i.e., Voya Large and Voya Target go up and down completely randomly.
Pair Corralation between Voya Large and Voya Target
Assuming the 90 days horizon Voya Large Cap is expected to generate 1.2 times more return on investment than Voya Target. However, Voya Large is 1.2 times more volatile than Voya Target Retirement. It trades about 0.15 of its potential returns per unit of risk. Voya Target Retirement is currently generating about 0.14 per unit of risk. If you would invest 479.00 in Voya Large Cap on September 4, 2024 and sell it today you would earn a total of 165.00 from holding Voya Large Cap or generate 34.45% 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 Target Retirement
Performance |
| Timeline |
| Voya Large Cap |
| Voya Target Retirement |
Voya Large and Voya Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Large and Voya Target
The main advantage of trading using opposite Voya Large and Voya Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Large position performs unexpectedly, Voya Target 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 Target will offset losses from the drop in Voya Target's long position.| Voya Large vs. Goldman Sachs Financial | Voya Large vs. Gabelli Global Financial | Voya Large vs. Fidelity Advisor Financial | Voya Large vs. 1919 Financial Services |
| Voya Target vs. Voya Bond Index | Voya Target vs. Voya Bond Index | Voya Target vs. Voya Limited Maturity | Voya Target 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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