Correlation Between Vanguard Health and Voya Investment
Can any of the company-specific risk be diversified away by investing in both Vanguard Health 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 Vanguard Health and Voya Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Health Care and Voya Investment Grade, you can compare the effects of market volatilities on Vanguard Health 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 Vanguard Health with a short position of Voya Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Health and Voya Investment.
Diversification Opportunities for Vanguard Health and Voya Investment
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and Voya is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care 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 Vanguard Health 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 Vanguard Health Care 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 Vanguard Health i.e., Vanguard Health and Voya Investment go up and down completely randomly.
Pair Corralation between Vanguard Health and Voya Investment
Assuming the 90 days horizon Vanguard Health Care is expected to under-perform the Voya Investment. In addition to that, Vanguard Health is 5.81 times more volatile than Voya Investment Grade. It trades about -0.18 of its total potential returns per unit of risk. Voya Investment Grade is currently generating about 0.03 per unit of volatility. If you would invest 904.00 in Voya Investment Grade on October 20, 2024 and sell it today you would earn a total of 2.00 from holding Voya Investment Grade or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Health Care vs. Voya Investment Grade
Performance |
| Timeline |
| Vanguard Health Care |
| Voya Investment Grade |
Vanguard Health and Voya Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Health and Voya Investment
The main advantage of trading using opposite Vanguard Health and Voya Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Health 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.| Vanguard Health vs. Vanguard Energy Fund | Vanguard Health vs. Vanguard Dividend Growth | Vanguard Health vs. Vanguard Wellington Fund | Vanguard Health vs. Vanguard Capital Opportunity |
| Voya Investment vs. Ftfa Franklin Templeton Growth | Voya Investment vs. The Hartford Growth | Voya Investment vs. Morningstar Aggressive Growth | Voya Investment vs. Tfa Alphagen Growth |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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