Correlation Between Voya Target and Vy(r) Franklin
Can any of the company-specific risk be diversified away by investing in both Voya Target and Vy(r) Franklin 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 Vy(r) Franklin 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 Vy Franklin Income, you can compare the effects of market volatilities on Voya Target and Vy(r) Franklin 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 Vy(r) Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Target and Vy(r) Franklin.
Diversification Opportunities for Voya Target and Vy(r) Franklin
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and Vy(r) is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and Vy Franklin Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Franklin Income 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 Vy(r) Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Franklin Income has no effect on the direction of Voya Target i.e., Voya Target and Vy(r) Franklin go up and down completely randomly.
Pair Corralation between Voya Target and Vy(r) Franklin
Assuming the 90 days horizon Voya Target Retirement is expected to generate 1.47 times more return on investment than Vy(r) Franklin. However, Voya Target is 1.47 times more volatile than Vy Franklin Income. It trades about 0.15 of its potential returns per unit of risk. Vy Franklin Income is currently generating about 0.16 per unit of risk. If you would invest 1,344 in Voya Target Retirement on October 24, 2024 and sell it today you would earn a total of 24.00 from holding Voya Target Retirement or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Target Retirement vs. Vy Franklin Income
Performance |
| Timeline |
| Voya Target Retirement |
| Vy Franklin Income |
Voya Target and Vy(r) Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Target and Vy(r) Franklin
The main advantage of trading using opposite Voya Target and Vy(r) Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Target position performs unexpectedly, Vy(r) Franklin 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(r) Franklin will offset losses from the drop in Vy(r) Franklin's long position.| Voya Target vs. Health Care Fund | Voya Target vs. Highland Longshort Healthcare | Voya Target vs. Tekla Healthcare Investors | Voya Target vs. Deutsche Health And |
| Vy(r) Franklin vs. Jpmorgan Diversified Fund | Vy(r) Franklin vs. Fulcrum Diversified Absolute | Vy(r) Franklin vs. Global Diversified Income | Vy(r) Franklin vs. Allianzgi Diversified 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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