Correlation Between Growth Fund and Voya Large-cap
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Voya Large-cap 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 Growth Fund and Voya Large-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Voya Large Cap Growth, you can compare the effects of market volatilities on Growth Fund and Voya Large-cap 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 Growth Fund with a short position of Voya Large-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Voya Large-cap.
Diversification Opportunities for Growth Fund and Voya Large-cap
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Growth and Voya is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Voya Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap and Growth 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 Growth Fund Of are associated (or correlated) with Voya Large-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Growth Fund i.e., Growth Fund and Voya Large-cap go up and down completely randomly.
Pair Corralation between Growth Fund and Voya Large-cap
Assuming the 90 days horizon Growth Fund is expected to generate 1.29 times less return on investment than Voya Large-cap. In addition to that, Growth Fund is 1.02 times more volatile than Voya Large Cap Growth. It trades about 0.02 of its total potential returns per unit of risk. Voya Large Cap Growth is currently generating about 0.03 per unit of volatility. If you would invest 2,950 in Voya Large Cap Growth on December 5, 2024 and sell it today you would earn a total of 105.00 from holding Voya Large Cap Growth or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Growth Fund Of vs. Voya Large Cap Growth
Performance |
| Timeline |
| Growth Fund |
| Voya Large Cap |
Growth Fund and Voya Large-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Voya Large-cap
The main advantage of trading using opposite Growth Fund and Voya Large-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Voya Large-cap 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 Large-cap will offset losses from the drop in Voya Large-cap's long position.The idea behind Growth Fund Of and Voya Large Cap Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Voya Large-cap vs. Dreyfusstandish Global Fixed | ||
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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