Correlation Between Intermediate-term and Voya High
Can any of the company-specific risk be diversified away by investing in both Intermediate-term 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 Intermediate-term and Voya High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Term Tax Free Bond and Voya High Yield, you can compare the effects of market volatilities on Intermediate-term 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 Intermediate-term with a short position of Voya High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate-term and Voya High.
Diversification Opportunities for Intermediate-term and Voya High
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Intermediate-term and Voya is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Term Tax Free Bon 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 Intermediate-term 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 Intermediate Term Tax Free Bond 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 Intermediate-term i.e., Intermediate-term and Voya High go up and down completely randomly.
Pair Corralation between Intermediate-term and Voya High
Assuming the 90 days horizon Intermediate-term is expected to generate 1.58 times less return on investment than Voya High. But when comparing it to its historical volatility, Intermediate Term Tax Free Bond is 1.23 times less risky than Voya High. It trades about 0.15 of its potential returns per unit of risk. Voya High Yield is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 622.00 in Voya High Yield on September 4, 2024 and sell it today you would earn a total of 77.00 from holding Voya High Yield or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermediate Term Tax Free Bon vs. Voya High Yield
Performance |
| Timeline |
| Intermediate Term Tax |
| Voya High Yield |
Intermediate-term and Voya High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate-term and Voya High
The main advantage of trading using opposite Intermediate-term and Voya High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate-term 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.| Intermediate-term vs. Mid Cap Value | Intermediate-term vs. Equity Growth Fund | Intermediate-term vs. Income Growth Fund | Intermediate-term vs. Diversified Bond Fund |
| Voya High vs. Angel Oak Financial | Voya High vs. Gmo High Yield | Voya High vs. Maryland Tax Free Bond | Voya High vs. Touchstone Premium Yield |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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