Correlation Between Voya Solution and Voya Multi-manager

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

By analyzing existing cross correlation between Voya Solution Moderately and Voya Multi Manager Mid, you can compare the effects of market volatilities on Voya Solution and Voya Multi-manager 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 Voya Solution with a short position of Voya Multi-manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Solution and Voya Multi-manager.

Diversification Opportunities for Voya Solution and Voya Multi-manager

0.31

Correlation Coefficient

Voya Solution  Voya Multi-manager

Weak diversification

The 3 months correlation between Voya and Voya is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Voya Solution Moderately and Voya Multi Manager Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Multi Manager and Voya Solution 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 Voya Solution Moderately are associated (or correlated) with Voya Multi-manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Multi Manager has no effect on the direction of Voya Solution i.e., Voya Solution and Voya Multi-manager go up and down completely randomly.

Pair Corralation between Voya Solution and Voya Multi-manager

Assuming the 90 days horizon Voya Solution Moderately is expected to under-perform the Voya Multi-manager. But the mutual fund apears to be less risky and, when comparing its historical volatility, Voya Solution Moderately is 1.15 times less risky than Voya Multi-manager. The mutual fund trades about -0.21 of its potential returns per unit of risk. The Voya Multi Manager Mid is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  980.00  in Voya Multi Manager Mid on October 14, 2024 and sell it today you would lose (30.00) from holding Voya Multi Manager Mid or give up 3.06% of portfolio value over 90 days.

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

Voya Solution Moderately  vs.  Voya Multi Manager Mid

Voya Solution Moderately

Risk-Adjusted Performance

0 of 100

Very Weak

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

Voya Multi Manager

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Multi Manager Mid has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Voya Solution and Voya Multi-manager

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

The idea behind Voya Solution Moderately and Voya Multi Manager Mid 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..