Correlation Between Balanced Fund and Voya Midcap
Can any of the company-specific risk be diversified away by investing in both Balanced Fund and Voya Midcap 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 Balanced Fund and Voya Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Investor and Voya Midcap Opportunities, you can compare the effects of market volatilities on Balanced Fund and Voya Midcap 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 Balanced Fund with a short position of Voya Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Voya Midcap.
Diversification Opportunities for Balanced Fund and Voya Midcap
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Balanced and Voya is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor and Voya Midcap Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Midcap Opportunities and Balanced Fund 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 Balanced Fund Investor are associated (or correlated) with Voya Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Midcap Opportunities has no effect on the direction of Balanced Fund i.e., Balanced Fund and Voya Midcap go up and down completely randomly.
Pair Corralation between Balanced Fund and Voya Midcap
Assuming the 90 days horizon Balanced Fund is expected to generate 2.27 times less return on investment than Voya Midcap. But when comparing it to its historical volatility, Balanced Fund Investor is 1.95 times less risky than Voya Midcap. It trades about 0.12 of its potential returns per unit of risk. Voya Midcap Opportunities is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,527 in Voya Midcap Opportunities on September 2, 2024 and sell it today you would earn a total of 476.00 from holding Voya Midcap Opportunities or generate 18.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Fund Investor vs. Voya Midcap Opportunities
Performance |
| Timeline |
| Balanced Fund Investor |
| Voya Midcap Opportunities |
Balanced Fund and Voya Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Voya Midcap
The main advantage of trading using opposite Balanced Fund and Voya Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund position performs unexpectedly, Voya Midcap 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 Midcap will offset losses from the drop in Voya Midcap's long position.| Balanced Fund vs. Select Fund Investor | Balanced Fund vs. Heritage Fund Investor | Balanced Fund vs. Value Fund Investor | Balanced Fund vs. Growth Fund Investor |
| Voya Midcap vs. Moderately Aggressive Balanced | Voya Midcap vs. Dimensional Retirement Income | Voya Midcap vs. Jp Morgan Smartretirement | Voya Midcap vs. Franklin Lifesmart Retirement |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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