Correlation Between Voya Intermediate and Voya Target
Can any of the company-specific risk be diversified away by investing in both Voya Intermediate 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 Intermediate 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 Intermediate Bond and Voya Target Retirement, you can compare the effects of market volatilities on Voya Intermediate 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 Intermediate with a short position of Voya Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Intermediate and Voya Target.
Diversification Opportunities for Voya Intermediate and Voya Target
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Voya is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Voya Intermediate Bond 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 Intermediate 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 Intermediate Bond 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 Intermediate i.e., Voya Intermediate and Voya Target go up and down completely randomly.
Pair Corralation between Voya Intermediate and Voya Target
Assuming the 90 days horizon Voya Intermediate is expected to generate 8.03 times less return on investment than Voya Target. But when comparing it to its historical volatility, Voya Intermediate Bond is 2.4 times less risky than Voya Target. It trades about 0.08 of its potential returns per unit of risk. Voya Target Retirement is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,456 in Voya Target Retirement on November 2, 2024 and sell it today you would earn a total of 56.00 from holding Voya Target Retirement or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Intermediate Bond vs. Voya Target Retirement
Performance |
| Timeline |
| Voya Intermediate Bond |
| Voya Target Retirement |
Voya Intermediate and Voya Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Intermediate and Voya Target
The main advantage of trading using opposite Voya Intermediate and Voya Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Intermediate 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 Intermediate vs. 1919 Financial Services | Voya Intermediate vs. Hennessy Large Cap | Voya Intermediate vs. Vanguard Financials Index | Voya Intermediate vs. Putnam Global Financials |
| Voya Target vs. Doubleline Core Fixed | Voya Target vs. Old Westbury Fixed | Voya Target vs. Tax Managed International Equity | Voya Target vs. Qs Global 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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