Correlation Between Voya Target and Aquila Three
Can any of the company-specific risk be diversified away by investing in both Voya Target and Aquila Three 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 Aquila Three 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 Aquila Three Peaks, you can compare the effects of market volatilities on Voya Target and Aquila Three 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 Aquila Three. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Target and Aquila Three.
Diversification Opportunities for Voya Target and Aquila Three
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Aquila is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and Aquila Three Peaks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Three Peaks 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 Aquila Three. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquila Three Peaks has no effect on the direction of Voya Target i.e., Voya Target and Aquila Three go up and down completely randomly.
Pair Corralation between Voya Target and Aquila Three
Assuming the 90 days horizon Voya Target Retirement is expected to generate 3.61 times more return on investment than Aquila Three. However, Voya Target is 3.61 times more volatile than Aquila Three Peaks. It trades about 0.13 of its potential returns per unit of risk. Aquila Three Peaks is currently generating about 0.1 per unit of risk. If you would invest 1,257 in Voya Target Retirement on November 3, 2024 and sell it today you would earn a total of 118.00 from holding Voya Target Retirement or generate 9.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Target Retirement vs. Aquila Three Peaks
Performance |
| Timeline |
| Voya Target Retirement |
| Aquila Three Peaks |
Voya Target and Aquila Three Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Target and Aquila Three
The main advantage of trading using opposite Voya Target and Aquila Three positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Target position performs unexpectedly, Aquila Three 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 Aquila Three will offset losses from the drop in Aquila Three's long position.| Voya Target vs. Delaware Investments Ultrashort | Voya Target vs. Oakhurst Short Duration | Voya Target vs. Transam Short Term Bond | Voya Target vs. Old Westbury Short Term |
| Aquila Three vs. Prudential Government Money | Aquila Three vs. Federated Government Income | Aquila Three vs. Virtus Seix Government | Aquila Three vs. Federated Government Income |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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