Correlation Between Voya Prime and Gotham Hedged
Can any of the company-specific risk be diversified away by investing in both Voya Prime and Gotham Hedged 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 Prime and Gotham Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Prime Rate and Gotham Hedged E, you can compare the effects of market volatilities on Voya Prime and Gotham Hedged 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 Prime with a short position of Gotham Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Prime and Gotham Hedged.
Diversification Opportunities for Voya Prime and Gotham Hedged
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Voya and Gotham is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Voya Prime Rate and Gotham Hedged E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gotham Hedged E and Voya Prime 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 Prime Rate are associated (or correlated) with Gotham Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gotham Hedged E has no effect on the direction of Voya Prime i.e., Voya Prime and Gotham Hedged go up and down completely randomly.
Pair Corralation between Voya Prime and Gotham Hedged
Assuming the 90 days horizon Voya Prime Rate is expected to generate 0.87 times more return on investment than Gotham Hedged. However, Voya Prime Rate is 1.14 times less risky than Gotham Hedged. It trades about 0.21 of its potential returns per unit of risk. Gotham Hedged E is currently generating about 0.18 per unit of risk. If you would invest 770.00 in Voya Prime Rate on November 28, 2024 and sell it today you would earn a total of 18.00 from holding Voya Prime Rate or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Prime Rate vs. Gotham Hedged E
Performance |
| Timeline |
| Voya Prime Rate |
| Gotham Hedged E |
Voya Prime and Gotham Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Prime and Gotham Hedged
The main advantage of trading using opposite Voya Prime and Gotham Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Prime position performs unexpectedly, Gotham Hedged 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 Gotham Hedged will offset losses from the drop in Gotham Hedged's long position.| Voya Prime vs. Vy Clarion Real | Voya Prime vs. Amg Managers Centersquare | Voya Prime vs. Nexpoint Real Estate | Voya Prime vs. Nomura Real Estate |
| Gotham Hedged vs. Rational Strategic Allocation | Gotham Hedged vs. Knights Of Umbus | Gotham Hedged vs. Balanced Allocation Fund | Gotham Hedged vs. Dodge Cox Stock |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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