Correlation Between Voya Large-cap and American Independence
Can any of the company-specific risk be diversified away by investing in both Voya Large-cap and American Independence 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 American Independence 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 American Independence Kansas, you can compare the effects of market volatilities on Voya Large-cap and American Independence 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 American Independence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Large-cap and American Independence.
Diversification Opportunities for Voya Large-cap and American Independence
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Voya and American is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Voya Large Cap Growth and American Independence Kansas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Independence 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 American Independence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Independence has no effect on the direction of Voya Large-cap i.e., Voya Large-cap and American Independence go up and down completely randomly.
Pair Corralation between Voya Large-cap and American Independence
Assuming the 90 days horizon Voya Large Cap Growth is expected to generate 4.42 times more return on investment than American Independence. However, Voya Large-cap is 4.42 times more volatile than American Independence Kansas. It trades about 0.32 of its potential returns per unit of risk. American Independence Kansas is currently generating about 0.22 per unit of risk. If you would invest 5,808 in Voya Large Cap Growth on September 1, 2024 and sell it today you would earn a total of 418.00 from holding Voya Large Cap Growth or generate 7.2% 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. American Independence Kansas
Performance |
| Timeline |
| Voya Large Cap |
| American Independence |
Voya Large-cap and American Independence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Large-cap and American Independence
The main advantage of trading using opposite Voya Large-cap and American Independence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Large-cap position performs unexpectedly, American Independence 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 American Independence will offset losses from the drop in American Independence's long position.| Voya Large-cap vs. Voya Bond Index | Voya Large-cap vs. Voya Bond Index | Voya Large-cap vs. Voya Limited Maturity | Voya Large-cap vs. Voya Limited Maturity |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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