Correlation Between Scout Small and Voya Investment
Can any of the company-specific risk be diversified away by investing in both Scout Small and Voya Investment 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 Scout Small and Voya Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scout Small Cap and Voya Investment Grade, you can compare the effects of market volatilities on Scout Small and Voya Investment 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 Scout Small with a short position of Voya Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scout Small and Voya Investment.
Diversification Opportunities for Scout Small and Voya Investment
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scout and Voya is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Scout Small Cap and Voya Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Investment Grade and Scout 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 Scout Small Cap are associated (or correlated) with Voya Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Investment Grade has no effect on the direction of Scout Small i.e., Scout Small and Voya Investment go up and down completely randomly.
Pair Corralation between Scout Small and Voya Investment
Assuming the 90 days horizon Scout Small Cap is expected to generate 3.27 times more return on investment than Voya Investment. However, Scout Small is 3.27 times more volatile than Voya Investment Grade. It trades about 0.11 of its potential returns per unit of risk. Voya Investment Grade is currently generating about 0.1 per unit of risk. If you would invest 2,443 in Scout Small Cap on September 14, 2024 and sell it today you would earn a total of 1,004 from holding Scout Small Cap or generate 41.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Scout Small Cap vs. Voya Investment Grade
Performance |
| Timeline |
| Scout Small Cap |
| Voya Investment Grade |
Scout Small and Voya Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scout Small and Voya Investment
The main advantage of trading using opposite Scout Small and Voya Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scout Small position performs unexpectedly, Voya Investment 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 Investment will offset losses from the drop in Voya Investment's long position.| Scout Small vs. Carillon Chartwell Short | Scout Small vs. Chartwell Short Duration | Scout Small vs. Carillon Chartwell Short | Scout Small vs. Eagle Growth Income |
| Voya Investment vs. Scout Small Cap | Voya Investment vs. Pace Smallmedium Value | Voya Investment vs. Vy Columbia Small | Voya Investment vs. Kinetics 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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