Correlation Between Metropolitan West and Voya Intermediate
Can any of the company-specific risk be diversified away by investing in both Metropolitan West and Voya Intermediate 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 Metropolitan West and Voya Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metropolitan West Total and Voya Intermediate Bond, you can compare the effects of market volatilities on Metropolitan West and Voya Intermediate 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 Metropolitan West with a short position of Voya Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan West and Voya Intermediate.
Diversification Opportunities for Metropolitan West and Voya Intermediate
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Metropolitan and VOYA is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan West Total and Voya Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Intermediate Bond and Metropolitan West 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 Metropolitan West Total are associated (or correlated) with Voya Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Intermediate Bond has no effect on the direction of Metropolitan West i.e., Metropolitan West and Voya Intermediate go up and down completely randomly.
Pair Corralation between Metropolitan West and Voya Intermediate
Assuming the 90 days horizon Metropolitan West Total is expected to generate 1.1 times more return on investment than Voya Intermediate. However, Metropolitan West is 1.1 times more volatile than Voya Intermediate Bond. It trades about 0.17 of its potential returns per unit of risk. Voya Intermediate Bond is currently generating about 0.16 per unit of risk. If you would invest 834.00 in Metropolitan West Total on November 27, 2024 and sell it today you would earn a total of 9.00 from holding Metropolitan West Total or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metropolitan West Total vs. Voya Intermediate Bond
Performance |
| Timeline |
| Metropolitan West Total |
| Voya Intermediate Bond |
Metropolitan West and Voya Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan West and Voya Intermediate
The main advantage of trading using opposite Metropolitan West and Voya Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan West position performs unexpectedly, Voya Intermediate 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 Intermediate will offset losses from the drop in Voya Intermediate's long position.| Metropolitan West vs. Needham Small Cap | Metropolitan West vs. Ep Emerging Markets | Metropolitan West vs. Goldman Sachs Small | Metropolitan West vs. Nuveen Small Cap |
| Voya Intermediate vs. Prudential California Muni | Voya Intermediate vs. Federated Government Income | Voya Intermediate vs. Bbh Intermediate Municipal | Voya Intermediate vs. Old Westbury Municipal |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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