Correlation Between California Bond and Voya High
Can any of the company-specific risk be diversified away by investing in both California Bond 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 California Bond and Voya High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Voya High Yield, you can compare the effects of market volatilities on California Bond 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 California Bond with a short position of Voya High. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Voya High.
Diversification Opportunities for California Bond and Voya High
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between California and Voya is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund 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 California Bond 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 California Bond Fund 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 California Bond i.e., California Bond and Voya High go up and down completely randomly.
Pair Corralation between California Bond and Voya High
Assuming the 90 days horizon California Bond Fund is expected to generate 2.48 times more return on investment than Voya High. However, California Bond is 2.48 times more volatile than Voya High Yield. It trades about 0.22 of its potential returns per unit of risk. Voya High Yield is currently generating about 0.19 per unit of risk. If you would invest 1,035 in California Bond Fund on September 1, 2024 and sell it today you would earn a total of 16.00 from holding California Bond Fund or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
California Bond Fund vs. Voya High Yield
Performance |
| Timeline |
| California Bond |
| Voya High Yield |
California Bond and Voya High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Voya High
The main advantage of trading using opposite California Bond and Voya High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond 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.| California Bond vs. Income Fund Income | California Bond vs. Usaa Nasdaq 100 | California Bond vs. Intermediate Term Bond Fund | California Bond vs. Usaa Intermediate Term |
| Voya High vs. Ab Bond Inflation | Voya High vs. Maryland Tax Free Bond | Voya High vs. California Bond Fund | Voya High vs. Blrc Sgy Mnp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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