Correlation Between Voya Global and Voya Solution
Can any of the company-specific risk be diversified away by investing in both Voya Global and Voya Solution 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 Global and Voya Solution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Global Equity and Voya Solution Income, you can compare the effects of market volatilities on Voya Global and Voya Solution 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 Global with a short position of Voya Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Global and Voya Solution.
Diversification Opportunities for Voya Global and Voya Solution
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Voya is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Voya Global Equity and Voya Solution Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Solution Income and Voya Global 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 Global Equity are associated (or correlated) with Voya Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Solution Income has no effect on the direction of Voya Global i.e., Voya Global and Voya Solution go up and down completely randomly.
Pair Corralation between Voya Global and Voya Solution
Assuming the 90 days horizon Voya Global Equity is expected to generate 1.91 times more return on investment than Voya Solution. However, Voya Global is 1.91 times more volatile than Voya Solution Income. It trades about 0.31 of its potential returns per unit of risk. Voya Solution Income is currently generating about 0.31 per unit of risk. If you would invest 4,572 in Voya Global Equity on November 9, 2024 and sell it today you would earn a total of 189.00 from holding Voya Global Equity or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Global Equity vs. Voya Solution Income
Performance |
| Timeline |
| Voya Global Equity |
| Voya Solution Income |
Voya Global and Voya Solution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Global and Voya Solution
The main advantage of trading using opposite Voya Global and Voya Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Global position performs unexpectedly, Voya Solution 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 Solution will offset losses from the drop in Voya Solution's long position.| Voya Global vs. Steward Small Mid Cap | Voya Global vs. SCOR PK | Voya Global vs. HUMANA INC | Voya Global vs. Morningstar Unconstrained Allocation |
| Voya Solution vs. Barings Active Short | Voya Solution vs. Dreyfus Short Intermediate | Voya Solution vs. Leader Short Term Bond | Voya Solution vs. Angel Oak Ultrashort |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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