Correlation Between Voya High and Voya Limited
Can any of the company-specific risk be diversified away by investing in both Voya High and Voya Limited 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 High and Voya Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya High Yield and Voya Limited Maturity, you can compare the effects of market volatilities on Voya High and Voya Limited 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 High with a short position of Voya Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Voya Limited.
Diversification Opportunities for Voya High and Voya Limited
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Voya is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Voya Limited Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Limited Maturity and Voya High 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 High Yield are associated (or correlated) with Voya Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Limited Maturity has no effect on the direction of Voya High i.e., Voya High and Voya Limited go up and down completely randomly.
Pair Corralation between Voya High and Voya Limited
Assuming the 90 days horizon Voya High Yield is expected to generate 1.09 times more return on investment than Voya Limited. However, Voya High is 1.09 times more volatile than Voya Limited Maturity. It trades about 0.21 of its potential returns per unit of risk. Voya Limited Maturity is currently generating about 0.07 per unit of risk. If you would invest 869.00 in Voya High Yield on August 24, 2024 and sell it today you would earn a total of 6.00 from holding Voya High Yield or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya High Yield vs. Voya Limited Maturity
Performance |
| Timeline |
| Voya High Yield |
| Voya Limited Maturity |
Voya High and Voya Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Voya Limited
The main advantage of trading using opposite Voya High and Voya Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High position performs unexpectedly, Voya Limited 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 Limited will offset losses from the drop in Voya Limited's long position.| Voya High vs. Alphacentric Lifesci Healthcare | Voya High vs. Lord Abbett Health | Voya High vs. Alger Health Sciences | Voya High vs. Delaware Healthcare Fund |
| Voya Limited vs. Conservative Balanced Allocation | Voya Limited vs. Blackrock Conservative Prprdptfinstttnl | Voya Limited vs. Delaware Limited Term Diversified | Voya Limited vs. Adams Diversified Equity |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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