Correlation Between Vanguard Star and Voya Index
Can any of the company-specific risk be diversified away by investing in both Vanguard Star and Voya Index 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 Star and Voya Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Star Fund and Voya Index Plus, you can compare the effects of market volatilities on Vanguard Star and Voya Index 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 Star with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Star and Voya Index.
Diversification Opportunities for Vanguard Star and Voya Index
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VANGUARD and Voya is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Star Fund and Voya Index Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Plus and Vanguard Star 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 Star Fund are associated (or correlated) with Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Plus has no effect on the direction of Vanguard Star i.e., Vanguard Star and Voya Index go up and down completely randomly.
Pair Corralation between Vanguard Star and Voya Index
Assuming the 90 days horizon Vanguard Star is expected to generate 1.93 times less return on investment than Voya Index. But when comparing it to its historical volatility, Vanguard Star Fund is 1.55 times less risky than Voya Index. It trades about 0.09 of its potential returns per unit of risk. Voya Index Plus is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,176 in Voya Index Plus on September 4, 2024 and sell it today you would earn a total of 931.00 from holding Voya Index Plus or generate 42.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Vanguard Star Fund vs. Voya Index Plus
Performance |
| Timeline |
| Vanguard Star |
| Voya Index Plus |
Vanguard Star and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Star and Voya Index
The main advantage of trading using opposite Vanguard Star and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Star position performs unexpectedly, Voya Index 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 Index will offset losses from the drop in Voya Index's long position.| Vanguard Star vs. Vanguard Wellington Fund | Vanguard Star vs. Vanguard Wellesley Income | Vanguard Star vs. Vanguard Windsor Ii | Vanguard Star vs. Vanguard Health Care |
| Voya Index vs. Commodities Strategy Fund | Voya Index vs. T Rowe Price | Voya Index vs. Eic Value Fund | Voya Index vs. Nasdaq 100 Fund Class |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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