Correlation Between Voya Index and Hartford Emerging
Can any of the company-specific risk be diversified away by investing in both Voya Index and Hartford Emerging 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 Hartford Emerging 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 The Hartford Emerging, you can compare the effects of market volatilities on Voya Index and Hartford Emerging 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 Hartford Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Hartford Emerging.
Diversification Opportunities for Voya Index and Hartford Emerging
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Voya and Hartford is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Solution and The Hartford Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Emerging 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 Hartford Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Emerging has no effect on the direction of Voya Index i.e., Voya Index and Hartford Emerging go up and down completely randomly.
Pair Corralation between Voya Index and Hartford Emerging
Assuming the 90 days horizon Voya Index Solution is expected to generate 0.87 times more return on investment than Hartford Emerging. However, Voya Index Solution is 1.14 times less risky than Hartford Emerging. It trades about 0.15 of its potential returns per unit of risk. The Hartford Emerging is currently generating about -0.07 per unit of risk. If you would invest 1,007 in Voya Index Solution on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Voya Index Solution or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Index Solution vs. The Hartford Emerging
Performance |
| Timeline |
| Voya Index Solution |
| Hartford Emerging |
Voya Index and Hartford Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Hartford Emerging
The main advantage of trading using opposite Voya Index and Hartford Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index position performs unexpectedly, Hartford Emerging 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 Hartford Emerging will offset losses from the drop in Hartford Emerging's long position.| Voya Index vs. Jpmorgan Smartretirement Income | Voya Index vs. HUMANA INC | Voya Index vs. Barloworld Ltd ADR | Voya Index vs. Morningstar Unconstrained Allocation |
| Hartford Emerging vs. Fpa Queens Road | Hartford Emerging vs. Ab Small Cap | Hartford Emerging vs. Omni Small Cap Value | Hartford Emerging vs. Boston Partners Small |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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