Correlation Between Pace Municipal and Voya High
Can any of the company-specific risk be diversified away by investing in both Pace Municipal and Voya High 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 Pace Municipal and Voya High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Municipal Fixed and Voya High Yield, you can compare the effects of market volatilities on Pace Municipal and Voya High 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 Pace Municipal with a short position of Voya High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Municipal and Voya High.
Diversification Opportunities for Pace Municipal and Voya High
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pace and Voya is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pace Municipal Fixed and Voya High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya High Yield and Pace Municipal 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 Pace Municipal Fixed are associated (or correlated) with Voya High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya High Yield has no effect on the direction of Pace Municipal i.e., Pace Municipal and Voya High go up and down completely randomly.
Pair Corralation between Pace Municipal and Voya High
Assuming the 90 days horizon Pace Municipal is expected to generate 7.36 times less return on investment than Voya High. In addition to that, Pace Municipal is 1.34 times more volatile than Voya High Yield. It trades about 0.01 of its total potential returns per unit of risk. Voya High Yield is currently generating about 0.14 per unit of volatility. If you would invest 692.00 in Voya High Yield on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Voya High Yield or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Municipal Fixed vs. Voya High Yield
Performance |
| Timeline |
| Pace Municipal Fixed |
| Voya High Yield |
Pace Municipal and Voya High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Municipal and Voya High
The main advantage of trading using opposite Pace Municipal and Voya High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Municipal position performs unexpectedly, Voya High 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 High will offset losses from the drop in Voya High's long position.| Pace Municipal vs. Multisector Bond Sma | Pace Municipal vs. Franklin High Yield | Pace Municipal vs. Touchstone Premium Yield | Pace Municipal vs. Western Asset Municipal |
| Voya High vs. Bbh Intermediate Municipal | Voya High vs. Pace Municipal Fixed | Voya High vs. Baird Strategic Municipal | Voya High vs. Nuveen Minnesota 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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