Correlation Between NYSE Composite and Voya Small
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Voya Small 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 NYSE Composite and Voya Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Voya Small Pany, you can compare the effects of market volatilities on NYSE Composite and Voya Small 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 NYSE Composite with a short position of Voya Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Voya Small.
Diversification Opportunities for NYSE Composite and Voya Small
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Voya is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Voya Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Small Pany and NYSE Composite 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 NYSE Composite are associated (or correlated) with Voya Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Small Pany has no effect on the direction of NYSE Composite i.e., NYSE Composite and Voya Small go up and down completely randomly.
Pair Corralation between NYSE Composite and Voya Small
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.68 times less return on investment than Voya Small. But when comparing it to its historical volatility, NYSE Composite is 2.61 times less risky than Voya Small. It trades about 0.24 of its potential returns per unit of risk. Voya Small Pany is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,590 in Voya Small Pany on August 28, 2024 and sell it today you would earn a total of 147.00 from holding Voya Small Pany or generate 9.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Voya Small Pany
Performance |
| Timeline |
NYSE Composite and Voya Small Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Voya Small Pany
Pair trading matchups for Voya Small
Pair Trading with NYSE Composite and Voya Small
The main advantage of trading using opposite NYSE Composite and Voya Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Voya Small 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 Small will offset losses from the drop in Voya Small's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Voya Small vs. Voya Bond Index | Voya Small vs. Voya Bond Index | Voya Small vs. Voya Limited Maturity | Voya Small 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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