Correlation Between Voya Solution and Voya Bond
Can any of the company-specific risk be diversified away by investing in both Voya Solution and Voya Bond 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 Solution and Voya Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Solution Income and Voya Bond Index, you can compare the effects of market volatilities on Voya Solution and Voya Bond 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 Solution with a short position of Voya Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Solution and Voya Bond.
Diversification Opportunities for Voya Solution and Voya Bond
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Voya and Voya is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Voya Solution Income and Voya Bond Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Bond Index and Voya Solution 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 Solution Income are associated (or correlated) with Voya Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Bond Index has no effect on the direction of Voya Solution i.e., Voya Solution and Voya Bond go up and down completely randomly.
Pair Corralation between Voya Solution and Voya Bond
Assuming the 90 days horizon Voya Solution Income is expected to generate 0.88 times more return on investment than Voya Bond. However, Voya Solution Income is 1.13 times less risky than Voya Bond. It trades about -0.01 of its potential returns per unit of risk. Voya Bond Index is currently generating about -0.06 per unit of risk. If you would invest 1,027 in Voya Solution Income on August 26, 2024 and sell it today you would lose (1.00) from holding Voya Solution Income or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Solution Income vs. Voya Bond Index
Performance |
| Timeline |
| Voya Solution Income |
| Voya Bond Index |
Voya Solution and Voya Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Solution and Voya Bond
The main advantage of trading using opposite Voya Solution and Voya Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Solution position performs unexpectedly, Voya Bond 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 Bond will offset losses from the drop in Voya Bond's long position.| Voya Solution vs. Voya Bond Index | Voya Solution vs. Voya Bond Index | Voya Solution vs. Voya Limited Maturity | Voya Solution vs. Voya Limited Maturity |
| Voya Bond vs. Voya Bond Index | Voya Bond vs. Voya Limited Maturity | Voya Bond vs. Voya Limited Maturity | Voya Bond vs. Voya Bond Index |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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