Correlation Between Voya Large-cap and Vanguard Wellington
Can any of the company-specific risk be diversified away by investing in both Voya Large-cap and Vanguard Wellington 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 Vanguard Wellington 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 Vanguard Wellington Fund, you can compare the effects of market volatilities on Voya Large-cap and Vanguard Wellington 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 Vanguard Wellington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Large-cap and Vanguard Wellington.
Diversification Opportunities for Voya Large-cap and Vanguard Wellington
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VOYA and Vanguard is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Voya Large Cap Growth and Vanguard Wellington Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Wellington 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 Vanguard Wellington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Wellington has no effect on the direction of Voya Large-cap i.e., Voya Large-cap and Vanguard Wellington go up and down completely randomly.
Pair Corralation between Voya Large-cap and Vanguard Wellington
Assuming the 90 days horizon Voya Large Cap Growth is expected to generate 2.05 times more return on investment than Vanguard Wellington. However, Voya Large-cap is 2.05 times more volatile than Vanguard Wellington Fund. It trades about 0.16 of its potential returns per unit of risk. Vanguard Wellington Fund is currently generating about 0.12 per unit of risk. If you would invest 5,945 in Voya Large Cap Growth on August 27, 2024 and sell it today you would earn a total of 237.00 from holding Voya Large Cap Growth or generate 3.99% 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. Vanguard Wellington Fund
Performance |
| Timeline |
| Voya Large Cap |
| Vanguard Wellington |
Voya Large-cap and Vanguard Wellington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Large-cap and Vanguard Wellington
The main advantage of trading using opposite Voya Large-cap and Vanguard Wellington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Large-cap position performs unexpectedly, Vanguard Wellington 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 Vanguard Wellington will offset losses from the drop in Vanguard Wellington's long position.| Voya Large-cap vs. Morningstar Aggressive Growth | Voya Large-cap vs. Western Asset High | Voya Large-cap vs. Metropolitan West High | Voya Large-cap vs. Needham Aggressive Growth |
| Vanguard Wellington vs. Vanguard Wellesley Income | Vanguard Wellington vs. Vanguard Primecap Fund | Vanguard Wellington vs. Vanguard Health Care | Vanguard Wellington vs. Vanguard Windsor Ii |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |