Correlation Between Voya Target and Payden Strategic
Can any of the company-specific risk be diversified away by investing in both Voya Target and Payden Strategic 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 Payden Strategic 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 Payden Strategic Income, you can compare the effects of market volatilities on Voya Target and Payden Strategic 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 Payden Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Target and Payden Strategic.
Diversification Opportunities for Voya Target and Payden Strategic
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Payden is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and Payden Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Strategic 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 Payden Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Strategic Income has no effect on the direction of Voya Target i.e., Voya Target and Payden Strategic go up and down completely randomly.
Pair Corralation between Voya Target and Payden Strategic
Assuming the 90 days horizon Voya Target is expected to generate 4.95 times less return on investment than Payden Strategic. In addition to that, Voya Target is 3.78 times more volatile than Payden Strategic Income. It trades about 0.01 of its total potential returns per unit of risk. Payden Strategic Income is currently generating about 0.18 per unit of volatility. If you would invest 953.00 in Payden Strategic Income on October 23, 2024 and sell it today you would earn a total of 5.00 from holding Payden Strategic Income or generate 0.52% 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. Payden Strategic Income
Performance |
| Timeline |
| Voya Target Retirement |
| Payden Strategic Income |
Voya Target and Payden Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Target and Payden Strategic
The main advantage of trading using opposite Voya Target and Payden Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Target position performs unexpectedly, Payden Strategic 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 Payden Strategic will offset losses from the drop in Payden Strategic'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 |
| Payden Strategic vs. American Funds Retirement | Payden Strategic vs. Lifestyle Ii Moderate | Payden Strategic vs. Voya Target Retirement | Payden Strategic 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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