Correlation Between Voya Solution and Omni Small

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

By analyzing existing cross correlation between Voya Solution Aggressive and Omni Small Cap Value, you can compare the effects of market volatilities on Voya Solution and Omni Small 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 Omni Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Solution and Omni Small.

Diversification Opportunities for Voya Solution and Omni Small

0.59

Correlation Coefficient

Voya Solution  Omni Small

Very weak diversification

The 3 months correlation between Voya and Omni is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Voya Solution Aggressive and Omni Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omni Small Cap 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 Aggressive are associated (or correlated) with Omni Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omni Small Cap has no effect on the direction of Voya Solution i.e., Voya Solution and Omni Small go up and down completely randomly.

Pair Corralation between Voya Solution and Omni Small

Assuming the 90 days horizon Voya Solution Aggressive is expected to generate 0.4 times more return on investment than Omni Small. However, Voya Solution Aggressive is 2.48 times less risky than Omni Small. It trades about -0.06 of its potential returns per unit of risk. Omni Small Cap Value is currently generating about -0.46 per unit of risk. If you would invest  1,486  in Voya Solution Aggressive on September 25, 2024 and sell it today you would lose (15.00) from holding Voya Solution Aggressive or give up 1.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Voya Solution Aggressive  vs.  Omni Small Cap Value

Voya Solution Aggressive

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Solution Aggressive are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. 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.

Omni Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omni Small Cap Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Voya Solution and Omni Small

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

The idea behind Voya Solution Aggressive and Omni Small Cap Value 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.