Correlation Between Ab Small and Voya Index
Can any of the company-specific risk be diversified away by investing in both Ab Small 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 Ab Small and Voya Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Voya Index Solution, you can compare the effects of market volatilities on Ab Small 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 Ab Small with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Voya Index.
Diversification Opportunities for Ab Small and Voya Index
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SCYVX and Voya is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution and Ab Small 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 Ab Small Cap 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 Solution has no effect on the direction of Ab Small i.e., Ab Small and Voya Index go up and down completely randomly.
Pair Corralation between Ab Small and Voya Index
Assuming the 90 days horizon Ab Small is expected to generate 1.29 times less return on investment than Voya Index. In addition to that, Ab Small is 1.45 times more volatile than Voya Index Solution. It trades about 0.05 of its total potential returns per unit of risk. Voya Index Solution is currently generating about 0.09 per unit of volatility. If you would invest 1,298 in Voya Index Solution on September 12, 2024 and sell it today you would earn a total of 547.00 from holding Voya Index Solution or generate 42.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. Voya Index Solution
Performance |
| Timeline |
| Ab Small Cap |
| Voya Index Solution |
Ab Small and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Voya Index
The main advantage of trading using opposite Ab Small and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small 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.| Ab Small vs. Vanguard Small Cap Value | Ab Small vs. Vanguard Small Cap Value | Ab Small vs. Us Small Cap | Ab Small vs. Us Targeted Value |
| Voya Index vs. Amg River Road | Voya Index vs. Ab Small Cap | Voya Index vs. Applied Finance Explorer | Voya Index vs. Lsv Small Cap |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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