Correlation Between Voya Index and Voya Large-cap
Can any of the company-specific risk be diversified away by investing in both Voya Index and Voya Large-cap 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 Voya Large-cap 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 Voya Large Cap Growth, you can compare the effects of market volatilities on Voya Index and Voya Large-cap 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 Voya Large-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Voya Large-cap.
Diversification Opportunities for Voya Index and Voya Large-cap
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and Voya is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Solution and Voya Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap 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 Voya Large-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Voya Index i.e., Voya Index and Voya Large-cap go up and down completely randomly.
Pair Corralation between Voya Index and Voya Large-cap
Assuming the 90 days horizon Voya Index is expected to generate 1.58 times less return on investment than Voya Large-cap. But when comparing it to its historical volatility, Voya Index Solution is 1.56 times less risky than Voya Large-cap. It trades about 0.12 of its potential returns per unit of risk. Voya Large Cap Growth is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,277 in Voya Large Cap Growth on September 2, 2024 and sell it today you would earn a total of 1,650 from holding Voya Large Cap Growth or generate 38.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Index Solution vs. Voya Large Cap Growth
Performance |
| Timeline |
| Voya Index Solution |
| Voya Large Cap |
Voya Index and Voya Large-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Voya Large-cap
The main advantage of trading using opposite Voya Index and Voya Large-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index position performs unexpectedly, Voya Large-cap 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 Large-cap will offset losses from the drop in Voya Large-cap's long position.| Voya Index vs. Balanced Fund Investor | Voya Index vs. Arrow Managed Futures | Voya Index vs. Leggmason Partners Institutional | Voya Index vs. Abr 7525 Volatility |
| Voya Large-cap vs. Voya Bond Index | Voya Large-cap vs. Voya Bond Index | Voya Large-cap vs. Voya Limited Maturity | Voya Large-cap vs. Voya Limited Maturity |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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