Correlation Between Lsv Small and Voya Index
Can any of the company-specific risk be diversified away by investing in both Lsv Small and Voya Index 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 Lsv Small and Voya Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lsv Small Cap and Voya Index Plus, you can compare the effects of market volatilities on Lsv Small and Voya Index 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 Lsv Small with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lsv Small and Voya Index.
Diversification Opportunities for Lsv Small and Voya Index
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lsv and Voya is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Small Cap and Voya Index Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Plus and Lsv Small 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 Lsv Small Cap are associated (or correlated) with Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Plus has no effect on the direction of Lsv Small i.e., Lsv Small and Voya Index go up and down completely randomly.
Pair Corralation between Lsv Small and Voya Index
Assuming the 90 days horizon Lsv Small is expected to generate 1.29 times less return on investment than Voya Index. In addition to that, Lsv Small is 1.11 times more volatile than Voya Index Plus. It trades about 0.05 of its total potential returns per unit of risk. Voya Index Plus is currently generating about 0.07 per unit of volatility. If you would invest 1,562 in Voya Index Plus on September 12, 2024 and sell it today you would earn a total of 689.00 from holding Voya Index Plus or generate 44.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lsv Small Cap vs. Voya Index Plus
Performance |
| Timeline |
| Lsv Small Cap |
| Voya Index Plus |
Lsv Small and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lsv Small and Voya Index
The main advantage of trading using opposite Lsv Small and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lsv Small position performs unexpectedly, Voya Index 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 Index will offset losses from the drop in Voya Index's long position.| Lsv Small vs. Vanguard Small Cap Value | Lsv Small vs. Vanguard Small Cap Value | Lsv Small vs. Us Small Cap | Lsv Small vs. Us Targeted Value |
| Voya Index vs. Ab Small Cap | Voya Index vs. Heartland Value Plus | Voya Index vs. Palm Valley Capital | Voya Index vs. Lsv Small Cap |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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