Correlation Between Voya Solution and Smallcap Growth
Can any of the company-specific risk be diversified away by investing in both Voya Solution and Smallcap Growth 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 Smallcap Growth 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 Smallcap Growth Fund, you can compare the effects of market volatilities on Voya Solution and Smallcap Growth 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 Smallcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Solution and Smallcap Growth.
Diversification Opportunities for Voya Solution and Smallcap Growth
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and Smallcap is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Voya Solution Aggressive and Smallcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap Growth 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 Smallcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Growth has no effect on the direction of Voya Solution i.e., Voya Solution and Smallcap Growth go up and down completely randomly.
Pair Corralation between Voya Solution and Smallcap Growth
Assuming the 90 days horizon Voya Solution Aggressive is expected to generate 0.61 times more return on investment than Smallcap Growth. However, Voya Solution Aggressive is 1.65 times less risky than Smallcap Growth. It trades about -0.02 of its potential returns per unit of risk. Smallcap Growth Fund is currently generating about -0.12 per unit of risk. If you would invest 1,434 in Voya Solution Aggressive on December 29, 2024 and sell it today you would lose (17.00) from holding Voya Solution Aggressive or give up 1.19% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Voya Solution Aggressive vs. Smallcap Growth Fund
Performance |
Timeline |
Voya Solution Aggressive |
Smallcap Growth |
Voya Solution and Smallcap Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Voya Solution and Smallcap Growth
The main advantage of trading using opposite Voya Solution and Smallcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Solution position performs unexpectedly, Smallcap Growth 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 Smallcap Growth will offset losses from the drop in Smallcap Growth's long position.Voya Solution vs. Gamco Natural Resources | Voya Solution vs. Transamerica Mlp Energy | Voya Solution vs. Transamerica Mlp Energy | Voya Solution vs. Franklin Natural Resources |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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