Correlation Between Small Cap and Voya Capital
Can any of the company-specific risk be diversified away by investing in both Small Cap and Voya Capital 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 Small Cap and Voya Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Stock and Voya Capital Allocation, you can compare the effects of market volatilities on Small Cap and Voya Capital 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 Small Cap with a short position of Voya Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Voya Capital.
Diversification Opportunities for Small Cap and Voya Capital
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Small and Voya is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Stock and Voya Capital Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Capital Allocation and Small Cap 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 Small Cap Stock are associated (or correlated) with Voya Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Capital Allocation has no effect on the direction of Small Cap i.e., Small Cap and Voya Capital go up and down completely randomly.
Pair Corralation between Small Cap and Voya Capital
Assuming the 90 days horizon Small Cap Stock is expected to generate 2.16 times more return on investment than Voya Capital. However, Small Cap is 2.16 times more volatile than Voya Capital Allocation. It trades about 0.06 of its potential returns per unit of risk. Voya Capital Allocation is currently generating about 0.09 per unit of risk. If you would invest 1,217 in Small Cap Stock on September 12, 2024 and sell it today you would earn a total of 285.00 from holding Small Cap Stock or generate 23.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Stock vs. Voya Capital Allocation
Performance |
| Timeline |
| Small Cap Stock |
| Voya Capital Allocation |
Small Cap and Voya Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Voya Capital
The main advantage of trading using opposite Small Cap and Voya Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Voya Capital 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 Capital will offset losses from the drop in Voya Capital's long position.| Small Cap vs. Shelton Emerging Markets | Small Cap vs. Kinetics Market Opportunities | Small Cap vs. Siit Emerging Markets | Small Cap vs. Investec Emerging Markets |
| Voya Capital vs. Rbb Fund | Voya Capital vs. Qs Growth Fund | Voya Capital vs. Small Cap Stock | Voya Capital vs. Commonwealth Global Fund |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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