Correlation Between Nasdaq-100(r) and Voya Intermediate
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) 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(r) 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(r) 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(r) with a short position of Voya Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Voya Intermediate.
Diversification Opportunities for Nasdaq-100(r) and Voya Intermediate
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nasdaq-100(r) and Voya is -0.76. 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(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 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(r) i.e., Nasdaq-100(r) and Voya Intermediate go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Voya Intermediate
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 6.1 times more return on investment than Voya Intermediate. However, Nasdaq-100(r) is 6.1 times more volatile than Voya Intermediate Bond. It trades about 0.09 of its potential returns per unit of risk. Voya Intermediate Bond is currently generating about 0.04 per unit of risk. If you would invest 55,303 in Nasdaq 100 2x Strategy on August 29, 2024 and sell it today you would earn a total of 2,099 from holding Nasdaq 100 2x Strategy or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Voya Intermediate Bond
Performance |
| Timeline |
| Nasdaq 100 2x |
| Voya Intermediate Bond |
Nasdaq-100(r) and Voya Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Voya Intermediate
The main advantage of trading using opposite Nasdaq-100(r) and Voya Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) 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(r) vs. Direxion Monthly Nasdaq 100 | Nasdaq-100(r) vs. HUMANA INC | Nasdaq-100(r) vs. Aquagold International | Nasdaq-100(r) vs. Barloworld Ltd ADR |
| Voya Intermediate vs. Commodities Strategy Fund | Voya Intermediate vs. Transamerica Emerging Markets | Voya Intermediate vs. T Rowe Price | Voya Intermediate vs. T Rowe Price |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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