Correlation Between Voya Index and Commodities Strategy
Can any of the company-specific risk be diversified away by investing in both Voya Index and Commodities Strategy 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 Index and Commodities Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Index Plus and Commodities Strategy Fund, you can compare the effects of market volatilities on Voya Index and Commodities Strategy 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 Index with a short position of Commodities Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Commodities Strategy.
Diversification Opportunities for Voya Index and Commodities Strategy
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Voya and Commodities is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Plus and Commodities Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodities Strategy and Voya Index 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 Index Plus are associated (or correlated) with Commodities Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodities Strategy has no effect on the direction of Voya Index i.e., Voya Index and Commodities Strategy go up and down completely randomly.
Pair Corralation between Voya Index and Commodities Strategy
Assuming the 90 days horizon Voya Index Plus is expected to generate 0.63 times more return on investment than Commodities Strategy. However, Voya Index Plus is 1.59 times less risky than Commodities Strategy. It trades about 0.23 of its potential returns per unit of risk. Commodities Strategy Fund is currently generating about 0.06 per unit of risk. If you would invest 2,830 in Voya Index Plus on September 12, 2024 and sell it today you would earn a total of 299.00 from holding Voya Index Plus or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Voya Index Plus vs. Commodities Strategy Fund
Performance |
| Timeline |
| Voya Index Plus |
| Commodities Strategy |
Voya Index and Commodities Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Commodities Strategy
The main advantage of trading using opposite Voya Index and Commodities Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index position performs unexpectedly, Commodities Strategy 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 Commodities Strategy will offset losses from the drop in Commodities Strategy's long position.| Voya Index vs. Kentucky Tax Free Short To Medium | Voya Index vs. Boston Partners Longshort | Voya Index vs. Cmg Ultra Short | Voya Index vs. Angel Oak Ultrashort |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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