Correlation Between NYSE Composite and Voya Prime
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Voya Prime 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 Prime 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 Prime Rate, you can compare the effects of market volatilities on NYSE Composite and Voya Prime 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 Prime. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Voya Prime.
Diversification Opportunities for NYSE Composite and Voya Prime
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Voya is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Voya Prime Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Prime Rate 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 Prime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Prime Rate has no effect on the direction of NYSE Composite i.e., NYSE Composite and Voya Prime go up and down completely randomly.
Pair Corralation between NYSE Composite and Voya Prime
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.0 times less return on investment than Voya Prime. In addition to that, NYSE Composite is 1.03 times more volatile than Voya Prime Rate. It trades about 0.14 of its total potential returns per unit of risk. Voya Prime Rate is currently generating about 0.15 per unit of volatility. If you would invest 696.00 in Voya Prime Rate on September 1, 2024 and sell it today you would earn a total of 88.00 from holding Voya Prime Rate or generate 12.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Voya Prime Rate
Performance |
| Timeline |
NYSE Composite and Voya Prime Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Voya Prime Rate
Pair trading matchups for Voya Prime
Pair Trading with NYSE Composite and Voya Prime
The main advantage of trading using opposite NYSE Composite and Voya Prime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Voya Prime 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 Prime will offset losses from the drop in Voya Prime's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Voya Prime vs. Vanguard Total Stock | Voya Prime vs. Vanguard 500 Index | Voya Prime vs. Vanguard Total Stock | Voya Prime vs. Vanguard Total Stock |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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