Correlation Between Sp Smallcap and Voya Index
Can any of the company-specific risk be diversified away by investing in both Sp Smallcap 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 Sp Smallcap and Voya Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp Smallcap 600 and Voya Index Plus, you can compare the effects of market volatilities on Sp Smallcap 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 Sp Smallcap with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Smallcap and Voya Index.
Diversification Opportunities for Sp Smallcap and Voya Index
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RYSVX and Voya is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sp Smallcap 600 and Voya Index Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Plus and Sp Smallcap 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 Sp Smallcap 600 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 Plus has no effect on the direction of Sp Smallcap i.e., Sp Smallcap and Voya Index go up and down completely randomly.
Pair Corralation between Sp Smallcap and Voya Index
Assuming the 90 days horizon Sp Smallcap 600 is expected to under-perform the Voya Index. In addition to that, Sp Smallcap is 1.2 times more volatile than Voya Index Plus. It trades about -0.1 of its total potential returns per unit of risk. Voya Index Plus is currently generating about -0.01 per unit of volatility. If you would invest 3,111 in Voya Index Plus on November 3, 2024 and sell it today you would lose (17.00) from holding Voya Index Plus or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sp Smallcap 600 vs. Voya Index Plus
Performance |
| Timeline |
| Sp Smallcap 600 |
| Voya Index Plus |
Sp Smallcap and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp Smallcap and Voya Index
The main advantage of trading using opposite Sp Smallcap and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp Smallcap 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.| Sp Smallcap vs. Barings Active Short | Sp Smallcap vs. Touchstone Ultra Short | Sp Smallcap vs. Blackrock Short Obligations | Sp Smallcap vs. Blackrock Global Longshort |
| Voya Index vs. Praxis Genesis Growth | Voya Index vs. The Hartford Growth | Voya Index vs. T Rowe Price | Voya Index vs. Stringer Growth 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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