Correlation Between Voya Large-cap and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Voya Large-cap and Polar Capital 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 Polar Capital 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 Polar Capital Emerging, you can compare the effects of market volatilities on Voya Large-cap and Polar Capital 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Large-cap and Polar Capital.
Diversification Opportunities for Voya Large-cap and Polar Capital
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VOYA and Polar is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Voya Large Cap Growth and Polar Capital Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Emerging 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Emerging has no effect on the direction of Voya Large-cap i.e., Voya Large-cap and Polar Capital go up and down completely randomly.
Pair Corralation between Voya Large-cap and Polar Capital
Assuming the 90 days horizon Voya Large Cap Growth is expected to generate 1.17 times more return on investment than Polar Capital. However, Voya Large-cap is 1.17 times more volatile than Polar Capital Emerging. It trades about 0.12 of its potential returns per unit of risk. Polar Capital Emerging is currently generating about 0.06 per unit of risk. If you would invest 4,503 in Voya Large Cap Growth on August 26, 2024 and sell it today you would earn a total of 1,679 from holding Voya Large Cap Growth or generate 37.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Large Cap Growth vs. Polar Capital Emerging
Performance |
| Timeline |
| Voya Large Cap |
| Polar Capital Emerging |
Voya Large-cap and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Large-cap and Polar Capital
The main advantage of trading using opposite Voya Large-cap and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Large-cap position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital's long position.| Voya Large-cap vs. Morningstar Defensive Bond | Voya Large-cap vs. California Bond Fund | Voya Large-cap vs. Dws Government Money | Voya Large-cap vs. Transamerica Intermediate Muni |
| Polar Capital vs. Polar Capital Emerging | Polar Capital vs. Fidelity Capital Income | Polar Capital vs. Fidelity Nasdaq Posite | Polar Capital vs. Utilities Portfolio Utilities |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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