Correlation Between Voya Index and Vy(r) Baron
Can any of the company-specific risk be diversified away by investing in both Voya Index and Vy(r) Baron 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 Index and Vy(r) Baron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Index Solution and Vy Baron Growth, you can compare the effects of market volatilities on Voya Index and Vy(r) Baron 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 Index with a short position of Vy(r) Baron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Vy(r) Baron.
Diversification Opportunities for Voya Index and Vy(r) Baron
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and Vy(r) is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Solution and Vy Baron Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Baron Growth and Voya Index 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 Index Solution are associated (or correlated) with Vy(r) Baron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Baron Growth has no effect on the direction of Voya Index i.e., Voya Index and Vy(r) Baron go up and down completely randomly.
Pair Corralation between Voya Index and Vy(r) Baron
Assuming the 90 days horizon Voya Index is expected to generate 1.22 times less return on investment than Vy(r) Baron. But when comparing it to its historical volatility, Voya Index Solution is 1.09 times less risky than Vy(r) Baron. It trades about 0.13 of its potential returns per unit of risk. Vy Baron Growth is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,328 in Vy Baron Growth on October 20, 2024 and sell it today you would earn a total of 56.00 from holding Vy Baron Growth or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Voya Index Solution vs. Vy Baron Growth
Performance |
| Timeline |
| Voya Index Solution |
| Vy Baron Growth |
Voya Index and Vy(r) Baron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Vy(r) Baron
The main advantage of trading using opposite Voya Index and Vy(r) Baron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index position performs unexpectedly, Vy(r) Baron 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 Vy(r) Baron will offset losses from the drop in Vy(r) Baron's long position.| Voya Index vs. Voya Bond Index | Voya Index vs. Voya Bond Index | Voya Index vs. Voya Limited Maturity | Voya Index 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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