Correlation Between Voya High and Ab Value
Can any of the company-specific risk be diversified away by investing in both Voya High and Ab Value 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 Ab Value 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 Ab Value Fund, you can compare the effects of market volatilities on Voya High and Ab Value 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 Ab Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Ab Value.
Diversification Opportunities for Voya High and Ab Value
Poor diversification
The 3 months correlation between Voya and ABVCX is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Ab Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Value Fund 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 Ab Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Value Fund has no effect on the direction of Voya High i.e., Voya High and Ab Value go up and down completely randomly.
Pair Corralation between Voya High and Ab Value
Assuming the 90 days horizon Voya High is expected to generate 2.13 times less return on investment than Ab Value. But when comparing it to its historical volatility, Voya High Yield is 2.68 times less risky than Ab Value. It trades about 0.11 of its potential returns per unit of risk. Ab Value Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,510 in Ab Value Fund on September 3, 2024 and sell it today you would earn a total of 566.00 from holding Ab Value Fund or generate 37.48% 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. Ab Value Fund
Performance |
| Timeline |
| Voya High Yield |
| Ab Value Fund |
Voya High and Ab Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Ab Value
The main advantage of trading using opposite Voya High and Ab Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High position performs unexpectedly, Ab Value 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 Ab Value will offset losses from the drop in Ab Value's long position.| Voya High vs. Ab Small Cap | Voya High vs. Ancorathelen Small Mid Cap | Voya High vs. The Hartford Small | Voya High vs. Kinetics Small Cap |
| Ab Value vs. Vanguard Value Index | Ab Value vs. Dodge Cox Stock | Ab Value vs. American Mutual Fund | Ab Value vs. American Funds American |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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