Correlation Between Energy Basic and Voya High
Can any of the company-specific risk be diversified away by investing in both Energy Basic and Voya High 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 Energy Basic and Voya High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Basic Materials and Voya High Yield, you can compare the effects of market volatilities on Energy Basic and Voya High 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 Energy Basic with a short position of Voya High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Basic and Voya High.
Diversification Opportunities for Energy Basic and Voya High
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ENERGY and Voya is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Energy Basic Materials and Voya High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya High Yield and Energy Basic 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 Energy Basic Materials are associated (or correlated) with Voya High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya High Yield has no effect on the direction of Energy Basic i.e., Energy Basic and Voya High go up and down completely randomly.
Pair Corralation between Energy Basic and Voya High
Assuming the 90 days horizon Energy Basic Materials is expected to generate 6.43 times more return on investment than Voya High. However, Energy Basic is 6.43 times more volatile than Voya High Yield. It trades about 0.07 of its potential returns per unit of risk. Voya High Yield is currently generating about 0.21 per unit of risk. If you would invest 1,023 in Energy Basic Materials on September 5, 2024 and sell it today you would earn a total of 12.00 from holding Energy Basic Materials or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Energy Basic Materials vs. Voya High Yield
Performance |
| Timeline |
| Energy Basic Materials |
| Voya High Yield |
Energy Basic and Voya High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Basic and Voya High
The main advantage of trading using opposite Energy Basic and Voya High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Basic position performs unexpectedly, Voya High 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 High will offset losses from the drop in Voya High's long position.| Energy Basic vs. Salient Alternative Beta | Energy Basic vs. Aggressive Balanced Allocation | Energy Basic vs. Salient Alternative Beta | Energy Basic vs. Moderately Aggressive Balanced |
| Voya High vs. Voya Bond Index | Voya High vs. Voya Bond Index | Voya High vs. Voya Limited Maturity | Voya High 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 CEOs Directory module to screen CEOs from public companies around the world.
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