Correlation Between Voya Index and Voya Midcap
Can any of the company-specific risk be diversified away by investing in both Voya Index and Voya Midcap 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 Midcap 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 Midcap Opportunities, you can compare the effects of market volatilities on Voya Index and Voya Midcap 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 Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Voya Midcap.
Diversification Opportunities for Voya Index and Voya Midcap
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and VOYA is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Solution and Voya Midcap Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Midcap Opportunities 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 Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Midcap Opportunities has no effect on the direction of Voya Index i.e., Voya Index and Voya Midcap go up and down completely randomly.
Pair Corralation between Voya Index and Voya Midcap
Assuming the 90 days horizon Voya Index is expected to generate 5.77 times less return on investment than Voya Midcap. But when comparing it to its historical volatility, Voya Index Solution is 2.0 times less risky than Voya Midcap. It trades about 0.12 of its potential returns per unit of risk. Voya Midcap Opportunities is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 2,571 in Voya Midcap Opportunities on August 30, 2024 and sell it today you would earn a total of 267.00 from holding Voya Midcap Opportunities or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Voya Index Solution vs. Voya Midcap Opportunities
Performance |
| Timeline |
| Voya Index Solution |
| Voya Midcap Opportunities |
Voya Index and Voya Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Voya Midcap
The main advantage of trading using opposite Voya Index and Voya Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index position performs unexpectedly, Voya Midcap 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 Midcap will offset losses from the drop in Voya Midcap's long position.| Voya Index vs. Alliancebernstein National Municipal | Voya Index vs. T Rowe Price | Voya Index vs. Bbh Intermediate Municipal | Voya Index vs. Counterpoint Tactical Municipal |
| Voya Midcap vs. Voya Bond Index | Voya Midcap vs. Voya Bond Index | Voya Midcap vs. Voya Limited Maturity | Voya Midcap 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |