Correlation Between Vanguard Total and Voya Intermediate
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Voya Intermediate 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 Vanguard Total and Voya Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Stock and Voya Intermediate Bond, you can compare the effects of market volatilities on Vanguard Total and Voya Intermediate 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 Vanguard Total with a short position of Voya Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Voya Intermediate.
Diversification Opportunities for Vanguard Total and Voya Intermediate
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and Voya is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Voya Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Intermediate Bond and Vanguard Total 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 Vanguard Total Stock are associated (or correlated) with Voya Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Intermediate Bond has no effect on the direction of Vanguard Total i.e., Vanguard Total and Voya Intermediate go up and down completely randomly.
Pair Corralation between Vanguard Total and Voya Intermediate
Assuming the 90 days horizon Vanguard Total Stock is expected to generate 2.12 times more return on investment than Voya Intermediate. However, Vanguard Total is 2.12 times more volatile than Voya Intermediate Bond. It trades about 0.11 of its potential returns per unit of risk. Voya Intermediate Bond is currently generating about 0.04 per unit of risk. If you would invest 9,302 in Vanguard Total Stock on August 28, 2024 and sell it today you would earn a total of 5,194 from holding Vanguard Total Stock or generate 55.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. Voya Intermediate Bond
Performance |
| Timeline |
| Vanguard Total Stock |
| Voya Intermediate Bond |
Vanguard Total and Voya Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Voya Intermediate
The main advantage of trading using opposite Vanguard Total and Voya Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Voya Intermediate 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 Voya Intermediate will offset losses from the drop in Voya Intermediate's long position.| Vanguard Total vs. Fidelity Series Government | Vanguard Total vs. Franklin Adjustable Government | Vanguard Total vs. Prudential Government Income | Vanguard Total vs. Ab Government Exchange |
| Voya Intermediate vs. Voya Bond Index | Voya Intermediate vs. Voya Bond Index | Voya Intermediate vs. Voya Limited Maturity | Voya Intermediate vs. Voya Limited Maturity |
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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