Correlation Between Conquer Risk and Voya Large-cap

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

By analyzing existing cross correlation between Conquer Risk Tactical and Voya Large Cap Growth, you can compare the effects of market volatilities on Conquer Risk and Voya Large-cap 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 Conquer Risk with a short position of Voya Large-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conquer Risk and Voya Large-cap.

Diversification Opportunities for Conquer Risk and Voya Large-cap

0.84

Correlation Coefficient

Conquer Risk  Voya Large-cap

Very poor diversification

The 3 months correlation between Conquer and Voya is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Conquer Risk Tactical and Voya Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap and Conquer Risk 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 Conquer Risk Tactical are associated (or correlated) with Voya Large-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Conquer Risk i.e., Conquer Risk and Voya Large-cap go up and down completely randomly.

Pair Corralation between Conquer Risk and Voya Large-cap

Assuming the 90 days horizon Conquer Risk Tactical is expected to generate 0.4 times more return on investment than Voya Large-cap. However, Conquer Risk Tactical is 2.51 times less risky than Voya Large-cap. It trades about -0.07 of its potential returns per unit of risk. Voya Large Cap Growth is currently generating about -0.22 per unit of risk. If you would invest  1,068  in Conquer Risk Tactical on October 15, 2024 and sell it today you would lose (8.00) from holding Conquer Risk Tactical or give up 0.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Conquer Risk Tactical  vs.  Voya Large Cap Growth

Conquer Risk Tactical

Risk-Adjusted Performance

3 of 100

Insignificant

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

Voya Large Cap

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Large Cap Growth are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Voya Large-cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Conquer Risk and Voya Large-cap

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

The idea behind Conquer Risk Tactical and Voya Large Cap Growth 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..