Correlation Between Small Cap and Voya Index
Can any of the company-specific risk be diversified away by investing in both Small Cap and Voya Index 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 Index 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 Index Solution, you can compare the effects of market volatilities on Small Cap and Voya Index 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 Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Voya Index.
Diversification Opportunities for Small Cap and Voya Index
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Small and Voya is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Stock and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution 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 Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Small Cap i.e., Small Cap and Voya Index go up and down completely randomly.
Pair Corralation between Small Cap and Voya Index
Assuming the 90 days horizon Small Cap Stock is expected to generate 3.54 times more return on investment than Voya Index. However, Small Cap is 3.54 times more volatile than Voya Index Solution. It trades about 0.28 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.28 per unit of risk. If you would invest 1,391 in Small Cap Stock on September 2, 2024 and sell it today you would earn a total of 138.00 from holding Small Cap Stock or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Stock vs. Voya Index Solution
Performance |
| Timeline |
| Small Cap Stock |
| Voya Index Solution |
Small Cap and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Voya Index
The main advantage of trading using opposite Small Cap and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Voya Index 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 Index will offset losses from the drop in Voya Index's long position.| Small Cap vs. Calamos Global Equity | Small Cap vs. Cutler Equity | Small Cap vs. Us Vector Equity | Small Cap vs. Small Cap Equity |
| Voya Index vs. Commonwealth Global Fund | Voya Index vs. Small Cap Stock | Voya Index vs. Artisan Thematic Fund | Voya Index vs. Eic Value 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |