Correlation Between Fulcrum Diversified and Voya Large

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

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

Diversification Opportunities for Fulcrum Diversified and Voya Large

0.66

Correlation Coefficient

Fulcrum Diversified  Voya Large

Poor diversification

The 3 months correlation between Fulcrum and Voya is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Diversified Absolute and Voya Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap and Fulcrum Diversified 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 Fulcrum Diversified Absolute are associated (or correlated) with Voya Large. 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 Fulcrum Diversified i.e., Fulcrum Diversified and Voya Large go up and down completely randomly.

Pair Corralation between Fulcrum Diversified and Voya Large

Assuming the 90 days horizon Fulcrum Diversified Absolute is expected to under-perform the Voya Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fulcrum Diversified Absolute is 2.24 times less risky than Voya Large. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Voya Large Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  605.00  in Voya Large Cap on December 26, 2024 and sell it today you would earn a total of  15.00  from holding Voya Large Cap or generate 2.48% return on investment over 90 days.

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

Fulcrum Diversified Absolute  vs.  Voya Large Cap

Fulcrum Diversified

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fulcrum Diversified Absolute has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Fulcrum Diversified 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

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Large Cap are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Voya Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fulcrum Diversified and Voya Large

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

The idea behind Fulcrum Diversified Absolute and Voya Large Cap 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.