Correlation Between Voya Target and Select Fund
Can any of the company-specific risk be diversified away by investing in both Voya Target and Select Fund 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 Target and Select Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Target Retirement and Select Fund C, you can compare the effects of market volatilities on Voya Target and Select Fund 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 Target with a short position of Select Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Target and Select Fund.
Diversification Opportunities for Voya Target and Select Fund
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Voya and Select is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and Select Fund C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Fund C and Voya Target 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 Target Retirement are associated (or correlated) with Select Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Fund C has no effect on the direction of Voya Target i.e., Voya Target and Select Fund go up and down completely randomly.
Pair Corralation between Voya Target and Select Fund
Assuming the 90 days horizon Voya Target Retirement is expected to generate 0.51 times more return on investment than Select Fund. However, Voya Target Retirement is 1.97 times less risky than Select Fund. It trades about 0.01 of its potential returns per unit of risk. Select Fund C is currently generating about -0.05 per unit of risk. If you would invest 1,344 in Voya Target Retirement on October 23, 2024 and sell it today you would earn a total of 1.00 from holding Voya Target Retirement or generate 0.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Voya Target Retirement vs. Select Fund C
Performance |
Timeline |
Voya Target Retirement |
Select Fund C |
Voya Target and Select Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Voya Target and Select Fund
The main advantage of trading using opposite Voya Target and Select Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Target position performs unexpectedly, Select Fund 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 Select Fund will offset losses from the drop in Select Fund's long position.Voya Target vs. Blackrock Health Sciences | Voya Target vs. The Gabelli Healthcare | Voya Target vs. Vanguard Health Care | Voya Target vs. Health Care Ultrasector |
Select Fund vs. Franklin Lifesmart Retirement | Select Fund vs. Voya Target Retirement | Select Fund vs. Moderate Balanced Allocation | Select Fund vs. Target Retirement 2040 |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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