Correlation Between Calvert Moderate and Voya Retirement

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

By analyzing existing cross correlation between Calvert Moderate Allocation and Voya Retirement Moderate, you can compare the effects of market volatilities on Calvert Moderate and Voya Retirement 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 Calvert Moderate with a short position of Voya Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Moderate and Voya Retirement.

Diversification Opportunities for Calvert Moderate and Voya Retirement

0.87

Correlation Coefficient

Calvert Moderate  Voya Retirement

Very poor diversification

The 3 months correlation between Calvert and Voya is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Moderate Allocation and Voya Retirement Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Retirement Moderate and Calvert Moderate 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 Calvert Moderate Allocation are associated (or correlated) with Voya Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Retirement Moderate has no effect on the direction of Calvert Moderate i.e., Calvert Moderate and Voya Retirement go up and down completely randomly.

Pair Corralation between Calvert Moderate and Voya Retirement

Assuming the 90 days horizon Calvert Moderate Allocation is expected to under-perform the Voya Retirement. In addition to that, Calvert Moderate is 1.02 times more volatile than Voya Retirement Moderate. It trades about -0.01 of its total potential returns per unit of risk. Voya Retirement Moderate is currently generating about 0.03 per unit of volatility. If you would invest  1,072  in Voya Retirement Moderate on October 24, 2024 and sell it today you would earn a total of  11.00  from holding Voya Retirement Moderate or generate 1.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.78%
Values	Daily Returns

Calvert Moderate Allocation  vs.  Voya Retirement Moderate

Calvert Moderate All

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Moderate Allocation are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Calvert Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Retirement Moderate

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Retirement Moderate are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Voya Retirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calvert Moderate and Voya Retirement

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

The idea behind Calvert Moderate Allocation and Voya Retirement Moderate 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.