Correlation Between Voya Target and Aggressive Balanced
Can any of the company-specific risk be diversified away by investing in both Voya Target and Aggressive Balanced 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 Aggressive Balanced 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 Aggressive Balanced Allocation, you can compare the effects of market volatilities on Voya Target and Aggressive Balanced 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 Aggressive Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Target and Aggressive Balanced.
Diversification Opportunities for Voya Target and Aggressive Balanced
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and Aggressive is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and Aggressive Balanced Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Balanced 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 Aggressive Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Balanced has no effect on the direction of Voya Target i.e., Voya Target and Aggressive Balanced go up and down completely randomly.
Pair Corralation between Voya Target and Aggressive Balanced
Assuming the 90 days horizon Voya Target Retirement is expected to under-perform the Aggressive Balanced. In addition to that, Voya Target is 1.08 times more volatile than Aggressive Balanced Allocation. It trades about -0.22 of its total potential returns per unit of risk. Aggressive Balanced Allocation is currently generating about -0.22 per unit of volatility. If you would invest 1,232 in Aggressive Balanced Allocation on October 11, 2024 and sell it today you would lose (47.00) from holding Aggressive Balanced Allocation or give up 3.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Target Retirement vs. Aggressive Balanced Allocation
Performance |
| Timeline |
| Voya Target Retirement |
| Aggressive Balanced |
Voya Target and Aggressive Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Target and Aggressive Balanced
The main advantage of trading using opposite Voya Target and Aggressive Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Target position performs unexpectedly, Aggressive Balanced 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 Aggressive Balanced will offset losses from the drop in Aggressive Balanced's long position.| Voya Target vs. Ultra Short Fixed Income | Voya Target vs. Siit Ultra Short | Voya Target vs. Aamhimco Short Duration | Voya Target vs. Touchstone Ultra Short |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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