Correlation Between Voya Target and Cref Inflation-linked
Can any of the company-specific risk be diversified away by investing in both Voya Target and Cref Inflation-linked 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 Cref Inflation-linked 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 Cref Inflation Linked Bond, you can compare the effects of market volatilities on Voya Target and Cref Inflation-linked 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 Cref Inflation-linked. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Target and Cref Inflation-linked.
Diversification Opportunities for Voya Target and Cref Inflation-linked
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and Cref is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and Cref Inflation Linked Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Inflation Linked 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 Cref Inflation-linked. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Inflation Linked has no effect on the direction of Voya Target i.e., Voya Target and Cref Inflation-linked go up and down completely randomly.
Pair Corralation between Voya Target and Cref Inflation-linked
Assuming the 90 days horizon Voya Target Retirement is expected to generate 3.38 times more return on investment than Cref Inflation-linked. However, Voya Target is 3.38 times more volatile than Cref Inflation Linked Bond. It trades about 0.18 of its potential returns per unit of risk. Cref Inflation Linked Bond is currently generating about 0.33 per unit of risk. If you would invest 1,348 in Voya Target Retirement on November 7, 2024 and sell it today you would earn a total of 27.00 from holding Voya Target Retirement or generate 2.0% 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. Cref Inflation Linked Bond
Performance |
| Timeline |
| Voya Target Retirement |
| Cref Inflation Linked |
Voya Target and Cref Inflation-linked Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Target and Cref Inflation-linked
The main advantage of trading using opposite Voya Target and Cref Inflation-linked positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Target position performs unexpectedly, Cref Inflation-linked 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 Cref Inflation-linked will offset losses from the drop in Cref Inflation-linked's long position.| Voya Target vs. Lord Abbett Convertible | Voya Target vs. Rationalpier 88 Convertible | Voya Target vs. Advent Claymore Convertible | Voya Target vs. Calamos Dynamic Convertible |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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