Correlation Between Smallcap Fund and Voya Target
Can any of the company-specific risk be diversified away by investing in both Smallcap Fund and Voya Target 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 Smallcap Fund and Voya Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap Fund Fka and Voya Target Retirement, you can compare the effects of market volatilities on Smallcap Fund and Voya Target 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 Smallcap Fund with a short position of Voya Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Fund and Voya Target.
Diversification Opportunities for Smallcap Fund and Voya Target
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Smallcap and Voya is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Fund Fka and Voya Target Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Target Retirement and Smallcap Fund 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 Smallcap Fund Fka are associated (or correlated) with Voya Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Target Retirement has no effect on the direction of Smallcap Fund i.e., Smallcap Fund and Voya Target go up and down completely randomly.
Pair Corralation between Smallcap Fund and Voya Target
Assuming the 90 days horizon Smallcap Fund Fka is expected to generate 2.12 times more return on investment than Voya Target. However, Smallcap Fund is 2.12 times more volatile than Voya Target Retirement. It trades about 0.07 of its potential returns per unit of risk. Voya Target Retirement is currently generating about 0.13 per unit of risk. If you would invest 2,392 in Smallcap Fund Fka on November 3, 2024 and sell it today you would earn a total of 256.00 from holding Smallcap Fund Fka or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap Fund Fka vs. Voya Target Retirement
Performance |
| Timeline |
| Smallcap Fund Fka |
| Voya Target Retirement |
Smallcap Fund and Voya Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap Fund and Voya Target
The main advantage of trading using opposite Smallcap Fund and Voya Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Fund position performs unexpectedly, Voya Target 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 Target will offset losses from the drop in Voya Target's long position.| Smallcap Fund vs. Vanguard Small Cap Index | Smallcap Fund vs. Vanguard Small Cap Index | Smallcap Fund vs. Vanguard Small Cap Index | Smallcap Fund vs. Vanguard Small Cap Index |
| Voya Target vs. Delaware Investments Ultrashort | Voya Target vs. Oakhurst Short Duration | Voya Target vs. Transam Short Term Bond | Voya Target vs. Old Westbury Short Term |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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