Correlation Between Nasdaq 100 and Voya Intermediate
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Voya Intermediate 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 Nasdaq 100 and Voya Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Voya Intermediate Bond, you can compare the effects of market volatilities on Nasdaq 100 and Voya Intermediate 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 Nasdaq 100 with a short position of Voya Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Voya Intermediate.
Diversification Opportunities for Nasdaq 100 and Voya Intermediate
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nasdaq and Voya is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Voya Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Intermediate Bond and Nasdaq 100 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 Nasdaq 100 2x Strategy are associated (or correlated) with Voya Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Intermediate Bond has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Voya Intermediate go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Voya Intermediate
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 5.62 times more return on investment than Voya Intermediate. However, Nasdaq 100 is 5.62 times more volatile than Voya Intermediate Bond. It trades about 0.11 of its potential returns per unit of risk. Voya Intermediate Bond is currently generating about 0.03 per unit of risk. If you would invest 15,093 in Nasdaq 100 2x Strategy on September 3, 2024 and sell it today you would earn a total of 26,641 from holding Nasdaq 100 2x Strategy or generate 176.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Voya Intermediate Bond
Performance |
| Timeline |
| Nasdaq 100 2x |
| Voya Intermediate Bond |
Nasdaq 100 and Voya Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Voya Intermediate
The main advantage of trading using opposite Nasdaq 100 and Voya Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Voya Intermediate 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 Intermediate will offset losses from the drop in Voya Intermediate's long position.| Nasdaq 100 vs. The Hartford Emerging | Nasdaq 100 vs. Kinetics Market Opportunities | Nasdaq 100 vs. Morgan Stanley Emerging | Nasdaq 100 vs. Locorr Market Trend |
| Voya Intermediate vs. Mesirow Financial Small | Voya Intermediate vs. 1919 Financial Services | Voya Intermediate vs. Vanguard Financials Index | Voya Intermediate vs. Fidelity Advisor Financial |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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