Correlation Between Health Care and Voya Target
Can any of the company-specific risk be diversified away by investing in both Health Care 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 Health Care and Voya Target 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 Target Retirement, you can compare the effects of market volatilities on Health Care 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 Health Care with a short position of Voya Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Care and Voya Target.
Diversification Opportunities for Health Care and Voya Target
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HEALTH and Voya is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Health Care Fund 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 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 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 Health Care i.e., Health Care and Voya Target go up and down completely randomly.
Pair Corralation between Health Care and Voya Target
Assuming the 90 days horizon Health Care Fund is expected to generate 1.25 times more return on investment than Voya Target. However, Health Care is 1.25 times more volatile than Voya Target Retirement. It trades about 0.21 of its potential returns per unit of risk. Voya Target Retirement is currently generating about 0.1 per unit of risk. If you would invest 2,904 in Health Care Fund on October 25, 2024 and sell it today you would earn a total of 87.00 from holding Health Care Fund or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Health Care Fund vs. Voya Target Retirement
Performance |
| Timeline |
| Health Care Fund |
| Voya Target Retirement |
Health Care and Voya Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health Care and Voya Target
The main advantage of trading using opposite Health Care and Voya Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Care 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.| Health Care vs. T Rowe Price | Health Care vs. Transamerica High Yield | Health Care vs. Federated High Yield | Health Care vs. Buffalo High Yield |
| Voya Target vs. Health Care Fund | Voya Target vs. Highland Longshort Healthcare | Voya Target vs. Tekla Healthcare Investors | Voya Target vs. Deutsche Health And |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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