Correlation Between Nasdaq-100(r) and Voya Target
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) 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 Nasdaq-100(r) and Voya Target 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 Target Retirement, you can compare the effects of market volatilities on Nasdaq-100(r) 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 Nasdaq-100(r) with a short position of Voya Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Voya Target.
Diversification Opportunities for Nasdaq-100(r) and Voya Target
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nasdaq-100(r) and Voya is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy 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 Nasdaq-100(r) 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 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 Nasdaq-100(r) i.e., Nasdaq-100(r) and Voya Target go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Voya Target
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to under-perform the Voya Target. In addition to that, Nasdaq-100(r) is 4.69 times more volatile than Voya Target Retirement. It trades about -0.1 of its total potential returns per unit of risk. Voya Target Retirement is currently generating about -0.29 per unit of volatility. If you would invest 1,279 in Voya Target Retirement on October 9, 2024 and sell it today you would lose (49.00) from holding Voya Target Retirement or give up 3.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Voya Target Retirement
Performance |
| Timeline |
| Nasdaq 100 2x |
| Voya Target Retirement |
Nasdaq-100(r) and Voya Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Voya Target
The main advantage of trading using opposite Nasdaq-100(r) and Voya Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) 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.| Nasdaq-100(r) vs. Versatile Bond Portfolio | Nasdaq-100(r) vs. L Abbett Fundamental | Nasdaq-100(r) vs. T Rowe Price | Nasdaq-100(r) vs. Arrow Managed Futures |
| Voya Target vs. The Gold Bullion | Voya Target vs. James Balanced Golden | Voya Target vs. Deutsche Gold Precious | Voya Target vs. Europac Gold Fund |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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