Correlation Between Visa and Voya Index
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Voya Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Voya Index Solution, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Voya Index.
Diversification Opportunities for Visa and Voya Index
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Visa and Voya is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A 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 Visa i.e., Visa and Voya Index go up and down completely randomly.
Pair Corralation between Visa and Voya Index
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.84 times more return on investment than Voya Index. However, Visa is 1.84 times more volatile than Voya Index Solution. It trades about 0.08 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.12 per unit of risk. If you would invest 25,473 in Visa Class A on August 26, 2024 and sell it today you would earn a total of 5,519 from holding Visa Class A or generate 21.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Voya Index Solution
Performance |
| Timeline |
| Visa Class A |
| Voya Index Solution |
Visa and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Voya Index
The main advantage of trading using opposite Visa and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Voya Index vs. Voya Bond Index | Voya Index vs. Voya Bond Index | Voya Index vs. Voya Limited Maturity | Voya Index vs. Voya Limited Maturity |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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