Correlation Between Voya Target and The Bond
Can any of the company-specific risk be diversified away by investing in both Voya Target and The Bond 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 The Bond 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 The Bond Fund, you can compare the effects of market volatilities on Voya Target and The Bond 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 The Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Target and The Bond.
Diversification Opportunities for Voya Target and The Bond
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and The is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and The Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund 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 The Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bond Fund has no effect on the direction of Voya Target i.e., Voya Target and The Bond go up and down completely randomly.
Pair Corralation between Voya Target and The Bond
Assuming the 90 days horizon Voya Target Retirement is expected to under-perform the The Bond. In addition to that, Voya Target is 3.5 times more volatile than The Bond Fund. It trades about -0.24 of its total potential returns per unit of risk. The Bond Fund is currently generating about -0.51 per unit of volatility. If you would invest 1,800 in The Bond Fund on October 10, 2024 and sell it today you would lose (48.00) from holding The Bond Fund or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Target Retirement vs. The Bond Fund
Performance |
| Timeline |
| Voya Target Retirement |
| Bond Fund |
Voya Target and The Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Target and The Bond
The main advantage of trading using opposite Voya Target and The Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Target position performs unexpectedly, The Bond 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 The Bond will offset losses from the drop in The Bond's long position.| Voya Target vs. The Gabelli Healthcare | Voya Target vs. Highland Longshort Healthcare | Voya Target vs. Tekla Healthcare Investors | Voya Target vs. Alger Health Sciences |
| The Bond vs. Small Cap Equity | The Bond vs. Ab Equity Income | The Bond vs. Ab Select Equity | The Bond vs. Locorr Dynamic Equity |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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