Correlation Between Applied Finance and Voya Solution
Can any of the company-specific risk be diversified away by investing in both Applied Finance and Voya Solution 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 Applied Finance and Voya Solution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Voya Solution Aggressive, you can compare the effects of market volatilities on Applied Finance and Voya Solution 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 Applied Finance with a short position of Voya Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Voya Solution.
Diversification Opportunities for Applied Finance and Voya Solution
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Applied and Voya is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Voya Solution Aggressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Solution Aggressive and Applied Finance 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 Applied Finance Explorer are associated (or correlated) with Voya Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Solution Aggressive has no effect on the direction of Applied Finance i.e., Applied Finance and Voya Solution go up and down completely randomly.
Pair Corralation between Applied Finance and Voya Solution
Assuming the 90 days horizon Applied Finance Explorer is expected to under-perform the Voya Solution. In addition to that, Applied Finance is 1.69 times more volatile than Voya Solution Aggressive. It trades about -0.04 of its total potential returns per unit of risk. Voya Solution Aggressive is currently generating about 0.06 per unit of volatility. If you would invest 1,437 in Voya Solution Aggressive on September 26, 2024 and sell it today you would earn a total of 34.00 from holding Voya Solution Aggressive or generate 2.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Applied Finance Explorer vs. Voya Solution Aggressive
Performance |
Timeline |
Applied Finance Explorer |
Voya Solution Aggressive |
Applied Finance and Voya Solution Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Applied Finance and Voya Solution
The main advantage of trading using opposite Applied Finance and Voya Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance position performs unexpectedly, Voya Solution 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 Solution will offset losses from the drop in Voya Solution's long position.Applied Finance vs. Thrivent Small Cap | Applied Finance vs. Applied Finance Select | Applied Finance vs. Parnassus Endeavor Fund | Applied Finance vs. Queens Road Small |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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