Correlation Between Voya Prime and Oakmark Bond
Can any of the company-specific risk be diversified away by investing in both Voya Prime and Oakmark Bond 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 Oakmark Bond 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 Oakmark Bond, you can compare the effects of market volatilities on Voya Prime and Oakmark Bond 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 Oakmark Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Prime and Oakmark Bond.
Diversification Opportunities for Voya Prime and Oakmark Bond
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Voya and Oakmark is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Voya Prime Rate and Oakmark Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Bond 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 Oakmark Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Bond has no effect on the direction of Voya Prime i.e., Voya Prime and Oakmark Bond go up and down completely randomly.
Pair Corralation between Voya Prime and Oakmark Bond
Assuming the 90 days horizon Voya Prime Rate is expected to generate 1.22 times more return on investment than Oakmark Bond. However, Voya Prime is 1.22 times more volatile than Oakmark Bond. It trades about 0.58 of its potential returns per unit of risk. Oakmark Bond is currently generating about 0.07 per unit of risk. If you would invest 730.00 in Voya Prime Rate on August 29, 2024 and sell it today you would earn a total of 42.00 from holding Voya Prime Rate or generate 5.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Prime Rate vs. Oakmark Bond
Performance |
| Timeline |
| Voya Prime Rate |
| Oakmark Bond |
Voya Prime and Oakmark Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Prime and Oakmark Bond
The main advantage of trading using opposite Voya Prime and Oakmark Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Prime position performs unexpectedly, Oakmark Bond 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 Oakmark Bond will offset losses from the drop in Oakmark Bond's long position.| Voya Prime vs. Vanguard Total Stock | Voya Prime vs. Vanguard 500 Index | Voya Prime vs. Vanguard Total Stock | Voya Prime vs. Vanguard Total Stock |
| Oakmark Bond vs. Oakmark International Fund | Oakmark Bond vs. Oakmark Fund Advisor | Oakmark Bond vs. Oakmark Select Fund |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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