Correlation Between Microsoft and Voya Multi-manager
Can any of the company-specific risk be diversified away by investing in both Microsoft and Voya Multi-manager 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 Microsoft and Voya Multi-manager into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Voya Multi Manager International, you can compare the effects of market volatilities on Microsoft and Voya Multi-manager 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 Microsoft with a short position of Voya Multi-manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Voya Multi-manager.
Diversification Opportunities for Microsoft and Voya Multi-manager
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Microsoft and Voya is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Voya Multi Manager Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Multi Manager and Microsoft 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 Microsoft are associated (or correlated) with Voya Multi-manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Multi Manager has no effect on the direction of Microsoft i.e., Microsoft and Voya Multi-manager go up and down completely randomly.
Pair Corralation between Microsoft and Voya Multi-manager
Given the investment horizon of 90 days Microsoft is expected to generate 2.42 times more return on investment than Voya Multi-manager. However, Microsoft is 2.42 times more volatile than Voya Multi Manager International. It trades about -0.05 of its potential returns per unit of risk. Voya Multi Manager International is currently generating about -0.13 per unit of risk. If you would invest 42,574 in Microsoft on August 27, 2024 and sell it today you would lose (874.00) from holding Microsoft or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Voya Multi Manager Internation
Performance |
| Timeline |
| Microsoft |
| Voya Multi Manager |
Microsoft and Voya Multi-manager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Voya Multi-manager
The main advantage of trading using opposite Microsoft and Voya Multi-manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Voya Multi-manager 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 Multi-manager will offset losses from the drop in Voya Multi-manager's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Rapid7 Inc |
| Voya Multi-manager vs. Voya Bond Index | Voya Multi-manager vs. Voya Bond Index | Voya Multi-manager vs. Voya Limited Maturity | Voya Multi-manager vs. Voya Limited Maturity |
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 Stocks Directory module to find actively traded stocks across global markets.
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