Correlation Between Health Care and Voya Global
Can any of the company-specific risk be diversified away by investing in both Health Care and Voya Global 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 Health Care and Voya Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health Care Fund and Voya Global Perspectives, you can compare the effects of market volatilities on Health Care and Voya Global 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 Health Care with a short position of Voya Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Care and Voya Global.
Diversification Opportunities for Health Care and Voya Global
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between HEALTH and Voya is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Health Care Fund and Voya Global Perspectives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Perspectives and Health Care 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 Health Care Fund are associated (or correlated) with Voya Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Global Perspectives has no effect on the direction of Health Care i.e., Health Care and Voya Global go up and down completely randomly.
Pair Corralation between Health Care and Voya Global
Assuming the 90 days horizon Health Care Fund is expected to under-perform the Voya Global. In addition to that, Health Care is 1.62 times more volatile than Voya Global Perspectives. It trades about -0.09 of its total potential returns per unit of risk. Voya Global Perspectives is currently generating about 0.12 per unit of volatility. If you would invest 880.00 in Voya Global Perspectives on September 2, 2024 and sell it today you would earn a total of 30.00 from holding Voya Global Perspectives or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Health Care Fund vs. Voya Global Perspectives
Performance |
| Timeline |
| Health Care Fund |
| Voya Global Perspectives |
Health Care and Voya Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health Care and Voya Global
The main advantage of trading using opposite Health Care and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Care position performs unexpectedly, Voya Global 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 Global will offset losses from the drop in Voya Global's long position.| Health Care vs. Banking Fund Class | Health Care vs. Basic Materials Fund | Health Care vs. Biotechnology Fund Class | Health Care vs. Government Long Bond |
| Voya Global vs. Voya Bond Index | Voya Global vs. Voya Bond Index | Voya Global vs. Voya Limited Maturity | Voya Global 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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