Correlation Between Mid Cap and Voya Index
Can any of the company-specific risk be diversified away by investing in both Mid Cap and Voya Index 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 Mid Cap and Voya Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap 15x Strategy and Voya Index Solution, you can compare the effects of market volatilities on Mid Cap and Voya Index 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 Mid Cap with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Voya Index.
Diversification Opportunities for Mid Cap and Voya Index
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mid and Voya is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution and Mid Cap 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 Mid Cap 15x Strategy are associated (or correlated) with Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Mid Cap i.e., Mid Cap and Voya Index go up and down completely randomly.
Pair Corralation between Mid Cap and Voya Index
Assuming the 90 days horizon Mid Cap 15x Strategy is expected to generate 1.87 times more return on investment than Voya Index. However, Mid Cap is 1.87 times more volatile than Voya Index Solution. It trades about 0.06 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.09 per unit of risk. If you would invest 9,658 in Mid Cap 15x Strategy on September 14, 2024 and sell it today you would earn a total of 4,628 from holding Mid Cap 15x Strategy or generate 47.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Cap 15x Strategy vs. Voya Index Solution
Performance |
| Timeline |
| Mid Cap 15x |
| Voya Index Solution |
Mid Cap and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Cap and Voya Index
The main advantage of trading using opposite Mid Cap and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap position performs unexpectedly, Voya Index 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 Index will offset losses from the drop in Voya Index's long position.| Mid Cap vs. Baillie Gifford Health | Mid Cap vs. Lord Abbett Health | Mid Cap vs. Allianzgi Health Sciences | Mid Cap vs. Vanguard Health Care |
| Voya Index vs. Voya Bond Index | Voya Index vs. Voya Bond Index | Voya Index vs. Voya Limited Maturity | Voya Index 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |