Correlation Between Vanguard Total and Voya Investors
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Voya Investors 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 Total and Voya Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Stock and Voya Investors Trust, you can compare the effects of market volatilities on Vanguard Total and Voya Investors 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 Total with a short position of Voya Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Voya Investors.
Diversification Opportunities for Vanguard Total and Voya Investors
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Voya is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Voya Investors Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Investors Trust and Vanguard Total 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 Total Stock are associated (or correlated) with Voya Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Investors Trust has no effect on the direction of Vanguard Total i.e., Vanguard Total and Voya Investors go up and down completely randomly.
Pair Corralation between Vanguard Total and Voya Investors
Assuming the 90 days horizon Vanguard Total is expected to generate 6.1 times less return on investment than Voya Investors. But when comparing it to its historical volatility, Vanguard Total Stock is 18.96 times less risky than Voya Investors. It trades about 0.11 of its potential returns per unit of risk. Voya Investors Trust is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Voya Investors Trust on August 27, 2024 and sell it today you would earn a total of 8.00 from holding Voya Investors Trust or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. Voya Investors Trust
Performance |
| Timeline |
| Vanguard Total Stock |
| Voya Investors Trust |
Vanguard Total and Voya Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Voya Investors
The main advantage of trading using opposite Vanguard Total and Voya Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Voya Investors 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 Investors will offset losses from the drop in Voya Investors' long position.| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard Small Cap Index | Vanguard Total vs. Vanguard Reit Index |
| Voya Investors vs. World Energy Fund | Voya Investors vs. Fidelity Advisor Energy | Voya Investors vs. Calvert Global Energy | Voya Investors vs. Goehring Rozencwajg 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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