Correlation Between Voya Large-cap and Northern Lights
Can any of the company-specific risk be diversified away by investing in both Voya Large-cap and Northern Lights 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 Voya Large-cap and Northern Lights into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Large Cap Growth and Northern Lights, you can compare the effects of market volatilities on Voya Large-cap and Northern Lights 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 Voya Large-cap with a short position of Northern Lights. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Large-cap and Northern Lights.
Diversification Opportunities for Voya Large-cap and Northern Lights
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Voya and Northern is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Voya Large Cap Growth and Northern Lights in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Lights and Voya Large-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 Voya Large Cap Growth are associated (or correlated) with Northern Lights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Lights has no effect on the direction of Voya Large-cap i.e., Voya Large-cap and Northern Lights go up and down completely randomly.
Pair Corralation between Voya Large-cap and Northern Lights
Assuming the 90 days horizon Voya Large Cap Growth is expected to generate 1.35 times more return on investment than Northern Lights. However, Voya Large-cap is 1.35 times more volatile than Northern Lights. It trades about 0.14 of its potential returns per unit of risk. Northern Lights is currently generating about 0.16 per unit of risk. If you would invest 5,961 in Voya Large Cap Growth on August 31, 2024 and sell it today you would earn a total of 214.00 from holding Voya Large Cap Growth or generate 3.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Large Cap Growth vs. Northern Lights
Performance |
| Timeline |
| Voya Large Cap |
| Northern Lights |
Voya Large-cap and Northern Lights Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Large-cap and Northern Lights
The main advantage of trading using opposite Voya Large-cap and Northern Lights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Large-cap position performs unexpectedly, Northern Lights 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 Northern Lights will offset losses from the drop in Northern Lights' long position.| Voya Large-cap vs. Europacific Growth Fund | Voya Large-cap vs. Washington Mutual Investors | Voya Large-cap vs. Capital World Growth | Voya Large-cap vs. HUMANA INC |
| Northern Lights vs. Gamco Natural Resources | Northern Lights vs. Tortoise Energy Independence | Northern Lights vs. Franklin Natural Resources | Northern Lights vs. Dreyfus Natural Resources |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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