Correlation Between Multi Manager and Voya Midcap
Can any of the company-specific risk be diversified away by investing in both Multi Manager and Voya Midcap 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 Multi Manager and Voya Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Manager High Yield and Voya Midcap Opportunities, you can compare the effects of market volatilities on Multi Manager and Voya Midcap 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 Multi Manager with a short position of Voya Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Manager and Voya Midcap.
Diversification Opportunities for Multi Manager and Voya Midcap
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and Voya is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager High Yield and Voya Midcap Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Midcap Opportunities and Multi Manager 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 Multi Manager High Yield are associated (or correlated) with Voya Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Midcap Opportunities has no effect on the direction of Multi Manager i.e., Multi Manager and Voya Midcap go up and down completely randomly.
Pair Corralation between Multi Manager and Voya Midcap
Assuming the 90 days horizon Multi Manager is expected to generate 47.06 times less return on investment than Voya Midcap. But when comparing it to its historical volatility, Multi Manager High Yield is 10.21 times less risky than Voya Midcap. It trades about 0.09 of its potential returns per unit of risk. Voya Midcap Opportunities is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 1,820 in Voya Midcap Opportunities on August 28, 2024 and sell it today you would earn a total of 211.00 from holding Voya Midcap Opportunities or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Manager High Yield vs. Voya Midcap Opportunities
Performance |
| Timeline |
| Multi Manager High |
| Voya Midcap Opportunities |
Multi Manager and Voya Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Manager and Voya Midcap
The main advantage of trading using opposite Multi Manager and Voya Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Manager position performs unexpectedly, Voya Midcap 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 Midcap will offset losses from the drop in Voya Midcap's long position.| Multi Manager vs. Baird Smallmid Cap | Multi Manager vs. M3sixty Capital Small | Multi Manager vs. Kinetics Small Cap | Multi Manager vs. Ab Small Cap |
| Voya Midcap vs. Voya Bond Index | Voya Midcap vs. Voya Bond Index | Voya Midcap vs. Voya Limited Maturity | Voya Midcap 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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