Correlation Between Voya Solution and Vanguard Emerging
Can any of the company-specific risk be diversified away by investing in both Voya Solution and Vanguard Emerging 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 Solution and Vanguard Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Solution Conservative and Vanguard Emerging Markets, you can compare the effects of market volatilities on Voya Solution and Vanguard Emerging 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 Solution with a short position of Vanguard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Solution and Vanguard Emerging.
Diversification Opportunities for Voya Solution and Vanguard Emerging
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Voya and Vanguard is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Voya Solution Conservative and Vanguard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Emerging Markets and Voya Solution 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 Solution Conservative are associated (or correlated) with Vanguard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Emerging Markets has no effect on the direction of Voya Solution i.e., Voya Solution and Vanguard Emerging go up and down completely randomly.
Pair Corralation between Voya Solution and Vanguard Emerging
Assuming the 90 days horizon Voya Solution Conservative is expected to generate 0.41 times more return on investment than Vanguard Emerging. However, Voya Solution Conservative is 2.44 times less risky than Vanguard Emerging. It trades about 0.12 of its potential returns per unit of risk. Vanguard Emerging Markets is currently generating about -0.09 per unit of risk. If you would invest 1,030 in Voya Solution Conservative on October 25, 2024 and sell it today you would earn a total of 7.00 from holding Voya Solution Conservative or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Solution Conservative vs. Vanguard Emerging Markets
Performance |
| Timeline |
| Voya Solution Conser |
| Vanguard Emerging Markets |
Voya Solution and Vanguard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Solution and Vanguard Emerging
The main advantage of trading using opposite Voya Solution and Vanguard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Solution position performs unexpectedly, Vanguard Emerging 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 Vanguard Emerging will offset losses from the drop in Vanguard Emerging's long position.| Voya Solution vs. Millerhoward High Income | Voya Solution vs. Pace High Yield | Voya Solution vs. Prudential High Yield | Voya Solution vs. Needham Aggressive Growth |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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