Correlation Between Voya Equity and Voya Vacs
Can any of the company-specific risk be diversified away by investing in both Voya Equity and Voya Vacs 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 Equity and Voya Vacs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Equity Trust and Voya Vacs Index, you can compare the effects of market volatilities on Voya Equity and Voya Vacs 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 Equity with a short position of Voya Vacs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Equity and Voya Vacs.
Diversification Opportunities for Voya Equity and Voya Vacs
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Voya and Voya is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Voya Equity Trust and Voya Vacs Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Vacs Index and Voya Equity 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 Equity Trust are associated (or correlated) with Voya Vacs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Vacs Index has no effect on the direction of Voya Equity i.e., Voya Equity and Voya Vacs go up and down completely randomly.
Pair Corralation between Voya Equity and Voya Vacs
Assuming the 90 days horizon Voya Equity Trust is expected to under-perform the Voya Vacs. In addition to that, Voya Equity is 1.98 times more volatile than Voya Vacs Index. It trades about -0.04 of its total potential returns per unit of risk. Voya Vacs Index is currently generating about 0.11 per unit of volatility. If you would invest 937.00 in Voya Vacs Index on September 3, 2024 and sell it today you would earn a total of 395.00 from holding Voya Vacs Index or generate 42.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 20.57% |
| Values | Daily Returns |
Voya Equity Trust vs. Voya Vacs Index
Performance |
| Timeline |
| Voya Equity Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Voya Vacs Index |
Voya Equity and Voya Vacs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Equity and Voya Vacs
The main advantage of trading using opposite Voya Equity and Voya Vacs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Equity position performs unexpectedly, Voya Vacs 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 Vacs will offset losses from the drop in Voya Vacs' long position.| Voya Equity vs. T Rowe Price | Voya Equity vs. T Rowe Price | Voya Equity vs. T Rowe Price | Voya Equity vs. T Rowe Price |
| Voya Vacs vs. Franklin Real Estate | Voya Vacs vs. Columbia Real Estate | Voya Vacs vs. Deutsche Real Estate | Voya Vacs vs. Prudential Real Estate |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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