Correlation Between Voya Target and Fidelity Zero
Can any of the company-specific risk be diversified away by investing in both Voya Target and Fidelity Zero 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 Fidelity Zero 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 Fidelity Zero Large, you can compare the effects of market volatilities on Voya Target and Fidelity Zero 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 Fidelity Zero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Target and Fidelity Zero.
Diversification Opportunities for Voya Target and Fidelity Zero
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and Fidelity is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and Fidelity Zero Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Zero Large 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 Fidelity Zero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Zero Large has no effect on the direction of Voya Target i.e., Voya Target and Fidelity Zero go up and down completely randomly.
Pair Corralation between Voya Target and Fidelity Zero
Assuming the 90 days horizon Voya Target is expected to generate 1.58 times less return on investment than Fidelity Zero. But when comparing it to its historical volatility, Voya Target Retirement is 1.37 times less risky than Fidelity Zero. It trades about 0.13 of its potential returns per unit of risk. Fidelity Zero Large is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,625 in Fidelity Zero Large on September 3, 2024 and sell it today you would earn a total of 542.00 from holding Fidelity Zero Large or generate 33.35% 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. Fidelity Zero Large
Performance |
| Timeline |
| Voya Target Retirement |
| Fidelity Zero Large |
Voya Target and Fidelity Zero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Target and Fidelity Zero
The main advantage of trading using opposite Voya Target and Fidelity Zero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Target position performs unexpectedly, Fidelity Zero 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 Fidelity Zero will offset losses from the drop in Fidelity Zero's long position.| Voya Target vs. Massmutual Premier Diversified | Voya Target vs. Lord Abbett Diversified | Voya Target vs. Aqr Diversified Arbitrage | Voya Target vs. Adams Diversified Equity |
| Fidelity Zero vs. Fidelity Zero Total | Fidelity Zero vs. Fidelity Zero International | Fidelity Zero vs. Fidelity Zero Extended | Fidelity Zero vs. Schwab Sp 500 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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