Correlation Between Voya Target and Us Strategic
Can any of the company-specific risk be diversified away by investing in both Voya Target and Us 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 Us 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 Us Strategic Equity, you can compare the effects of market volatilities on Voya Target and Us 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 Us Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Target and Us Strategic.
Diversification Opportunities for Voya Target and Us Strategic
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and RUSTX is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and Us Strategic Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Strategic Equity 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 Us Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Strategic Equity has no effect on the direction of Voya Target i.e., Voya Target and Us Strategic go up and down completely randomly.
Pair Corralation between Voya Target and Us Strategic
Assuming the 90 days horizon Voya Target Retirement is expected to generate 0.75 times more return on investment than Us Strategic. However, Voya Target Retirement is 1.33 times less risky than Us Strategic. It trades about 0.21 of its potential returns per unit of risk. Us Strategic Equity is currently generating about 0.06 per unit of risk. If you would invest 1,531 in Voya Target Retirement on September 13, 2024 and sell it today you would earn a total of 27.00 from holding Voya Target Retirement or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Voya Target Retirement vs. Us Strategic Equity
Performance |
| Timeline |
| Voya Target Retirement |
| Us Strategic Equity |
Voya Target and Us Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Target and Us Strategic
The main advantage of trading using opposite Voya Target and Us Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Target position performs unexpectedly, Us 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 Us Strategic will offset losses from the drop in Us Strategic's long position.| Voya Target vs. Voya Bond Index | Voya Target vs. Voya Bond Index | Voya Target vs. Voya Limited Maturity | Voya Target vs. Voya Limited Maturity |
| Us Strategic vs. International Developed Markets | Us Strategic vs. Global Real Estate | Us Strategic vs. Global Real Estate | Us Strategic vs. Global Real Estate |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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