Correlation Between Voya Index and Vy Columbia
Can any of the company-specific risk be diversified away by investing in both Voya Index and Vy Columbia 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 Columbia 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 Columbia Small, you can compare the effects of market volatilities on Voya Index and Vy Columbia 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 Columbia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Vy Columbia.
Diversification Opportunities for Voya Index and Vy Columbia
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and VYRDX is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Solution and Vy Columbia Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Columbia Small 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 Columbia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Columbia Small has no effect on the direction of Voya Index i.e., Voya Index and Vy Columbia go up and down completely randomly.
Pair Corralation between Voya Index and Vy Columbia
Assuming the 90 days horizon Voya Index is expected to generate 5.52 times less return on investment than Vy Columbia. But when comparing it to its historical volatility, Voya Index Solution is 2.51 times less risky than Vy Columbia. It trades about 0.12 of its potential returns per unit of risk. Vy Columbia Small is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,708 in Vy Columbia Small on August 27, 2024 and sell it today you would earn a total of 157.00 from holding Vy Columbia Small or generate 9.19% 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. Vy Columbia Small
Performance |
| Timeline |
| Voya Index Solution |
| Vy Columbia Small |
Voya Index and Vy Columbia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Vy Columbia
The main advantage of trading using opposite Voya Index and Vy Columbia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index position performs unexpectedly, Vy Columbia 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 Columbia will offset losses from the drop in Vy Columbia'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 |
| Vy Columbia vs. Voya Bond Index | Vy Columbia vs. Voya Bond Index | Vy Columbia vs. Voya Limited Maturity | Vy Columbia 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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