Correlation Between Voya Index and Voya Gnma
Can any of the company-specific risk be diversified away by investing in both Voya Index and Voya Gnma 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 Voya Gnma 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 Voya Gnma Income, you can compare the effects of market volatilities on Voya Index and Voya Gnma 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 Voya Gnma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Voya Gnma.
Diversification Opportunities for Voya Index and Voya Gnma
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VOYA and Voya is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Plus and Voya Gnma Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Gnma Income 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 Voya Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Gnma Income has no effect on the direction of Voya Index i.e., Voya Index and Voya Gnma go up and down completely randomly.
Pair Corralation between Voya Index and Voya Gnma
Assuming the 90 days horizon Voya Index Plus is expected to generate 3.05 times more return on investment than Voya Gnma. However, Voya Index is 3.05 times more volatile than Voya Gnma Income. It trades about 0.31 of its potential returns per unit of risk. Voya Gnma Income is currently generating about 0.12 per unit of risk. If you would invest 2,122 in Voya Index Plus on August 28, 2024 and sell it today you would earn a total of 177.00 from holding Voya Index Plus or generate 8.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Voya Index Plus vs. Voya Gnma Income
Performance |
| Timeline |
| Voya Index Plus |
| Voya Gnma Income |
Voya Index and Voya Gnma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Voya Gnma
The main advantage of trading using opposite Voya Index and Voya Gnma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index position performs unexpectedly, Voya Gnma 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 Gnma will offset losses from the drop in Voya Gnma's long position.| Voya Index vs. Voya Bond Index | Voya Index vs. Voya Bond Index | Voya Index vs. Voya Limited Maturity | Voya Index vs. Voya Limited Maturity |
| Voya Gnma vs. Fabxx | Voya Gnma vs. Leggmason Partners Institutional | Voya Gnma vs. Falcon Focus Scv | Voya Gnma vs. T Rowe Price |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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