Correlation Between Voya Index and Ab Small
Can any of the company-specific risk be diversified away by investing in both Voya Index and Ab Small 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 Ab Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Index Solution and Ab Small Cap, you can compare the effects of market volatilities on Voya Index and Ab Small 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 Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Ab Small.
Diversification Opportunities for Voya Index and Ab Small
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and QUAIX is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Solution and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 Solution are associated (or correlated) with Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Voya Index i.e., Voya Index and Ab Small go up and down completely randomly.
Pair Corralation between Voya Index and Ab Small
Assuming the 90 days horizon Voya Index is expected to generate 2.11 times less return on investment than Ab Small. But when comparing it to its historical volatility, Voya Index Solution is 1.91 times less risky than Ab Small. It trades about 0.06 of its potential returns per unit of risk. Ab Small Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,278 in Ab Small Cap on August 30, 2024 and sell it today you would earn a total of 2,630 from holding Ab Small Cap or generate 49.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Index Solution vs. Ab Small Cap
Performance |
| Timeline |
| Voya Index Solution |
| Ab Small Cap |
Voya Index and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Ab Small
The main advantage of trading using opposite Voya Index and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index position performs unexpectedly, Ab Small 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 Small will offset losses from the drop in Ab Small's long position.| Voya Index vs. Ab Small Cap | Voya Index vs. Tax Managed Mid Small | Voya Index vs. Touchstone Small Cap | Voya Index vs. Chartwell Small Cap |
| Ab Small vs. Putnam Equity Income | Ab Small vs. Putnam Growth Opportunities | Ab Small vs. HUMANA INC | Ab Small vs. Aquagold International |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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