Correlation Between Valic Company and Voya Index
Can any of the company-specific risk be diversified away by investing in both Valic Company and Voya Index 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 Valic Company and Voya Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and Voya Index Solution, you can compare the effects of market volatilities on Valic Company and Voya Index 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 Valic Company with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Voya Index.
Diversification Opportunities for Valic Company and Voya Index
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valic and Voya is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution and Valic Company 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 Valic Company I are associated (or correlated) with Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Valic Company i.e., Valic Company and Voya Index go up and down completely randomly.
Pair Corralation between Valic Company and Voya Index
Assuming the 90 days horizon Valic Company I is expected to generate 1.61 times more return on investment than Voya Index. However, Valic Company is 1.61 times more volatile than Voya Index Solution. It trades about 0.05 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.07 per unit of risk. If you would invest 1,080 in Valic Company I on August 24, 2024 and sell it today you would earn a total of 302.00 from holding Valic Company I or generate 27.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Voya Index Solution
Performance |
| Timeline |
| Valic Company I |
| Voya Index Solution |
Valic Company and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Voya Index
The main advantage of trading using opposite Valic Company and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Voya Index 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 Index will offset losses from the drop in Voya Index's long position.| Valic Company vs. Vanguard Small Cap Value | Valic Company vs. Vanguard Small Cap Value | Valic Company vs. Us Small Cap | Valic Company vs. Us Targeted Value |
| Voya Index vs. Great West Loomis Sayles | Voya Index vs. Lord Abbett Small | Voya Index vs. Ab Discovery Value | Voya Index vs. Valic Company I |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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