Correlation Between Champlain Mid and Voya Government

Can any of the company-specific risk be diversified away by investing in both Champlain Mid and Voya Government 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 Champlain Mid and Voya Government into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Champlain Mid Cap and Voya Government Money, you can compare the effects of market volatilities on Champlain Mid and Voya Government 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 Champlain Mid with a short position of Voya Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Mid and Voya Government.

Diversification Opportunities for Champlain Mid and Voya Government

0.0

Correlation Coefficient

Champlain Mid  Voya Government

Pay attention - limited upside

The 3 months correlation between Champlain and Voya is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Mid Cap and Voya Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Government Money and Champlain Mid 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 Champlain Mid Cap are associated (or correlated) with Voya Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Government Money has no effect on the direction of Champlain Mid i.e., Champlain Mid and Voya Government go up and down completely randomly.

Pair Corralation between Champlain Mid and Voya Government

Assuming the 90 days horizon Champlain Mid is expected to generate 22.24 times less return on investment than Voya Government. But when comparing it to its historical volatility, Champlain Mid Cap is 16.52 times less risky than Voya Government. It trades about 0.03 of its potential returns per unit of risk. Voya Government Money is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  92.00  in Voya Government Money on October 10, 2024 and sell it today you would earn a total of  8.00  from holding Voya Government Money or generate 8.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Champlain Mid Cap  vs.  Voya Government Money

Champlain Mid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Champlain Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Champlain Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Government Money

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Government Money has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Voya Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Champlain Mid and Voya Government

The main advantage of trading using opposite Champlain Mid and Voya Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Mid position performs unexpectedly, Voya Government 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 Government will offset losses from the drop in Voya Government's long position.

The idea behind Champlain Mid Cap and Voya Government Money pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.