Correlation Between Voya Prime and Thompson Midcap
Can any of the company-specific risk be diversified away by investing in both Voya Prime and Thompson Midcap 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 Thompson Midcap 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 Thompson Midcap Fund, you can compare the effects of market volatilities on Voya Prime and Thompson Midcap 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 Thompson Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Prime and Thompson Midcap.
Diversification Opportunities for Voya Prime and Thompson Midcap
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Thompson is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Voya Prime Rate and Thompson Midcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thompson Midcap 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 Thompson Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thompson Midcap has no effect on the direction of Voya Prime i.e., Voya Prime and Thompson Midcap go up and down completely randomly.
Pair Corralation between Voya Prime and Thompson Midcap
Assuming the 90 days horizon Voya Prime is expected to generate 1.2 times less return on investment than Thompson Midcap. But when comparing it to its historical volatility, Voya Prime Rate is 2.71 times less risky than Thompson Midcap. It trades about 0.5 of its potential returns per unit of risk. Thompson Midcap Fund is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,436 in Thompson Midcap Fund on August 27, 2024 and sell it today you would earn a total of 72.00 from holding Thompson Midcap Fund or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Prime Rate vs. Thompson Midcap Fund
Performance |
| Timeline |
| Voya Prime Rate |
| Thompson Midcap |
Voya Prime and Thompson Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Prime and Thompson Midcap
The main advantage of trading using opposite Voya Prime and Thompson Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Prime position performs unexpectedly, Thompson Midcap 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 Thompson Midcap will offset losses from the drop in Thompson Midcap's long position.| Voya Prime vs. Qs Large Cap | Voya Prime vs. Aqr Large Cap | Voya Prime vs. Quantitative U S | Voya Prime vs. Fisher Large Cap |
| Thompson Midcap vs. Thompson Largecap Fund | Thompson Midcap vs. Thompson Bond Fund | Thompson Midcap vs. Crm Smallmid Cap | Thompson Midcap vs. Perkins Select Value |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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