Correlation Between Voya Floating and Eic Value

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

By analyzing existing cross correlation between Voya Floating Rate and Eic Value Fund, you can compare the effects of market volatilities on Voya Floating and Eic Value 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 Floating with a short position of Eic Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Floating and Eic Value.

Diversification Opportunities for Voya Floating and Eic Value

-0.46

Correlation Coefficient

Voya Floating  Eic Value

Very good diversification

The 3 months correlation between Voya and Eic is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Voya Floating Rate and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund and Voya Floating 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 Floating Rate are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Voya Floating i.e., Voya Floating and Eic Value go up and down completely randomly.

Pair Corralation between Voya Floating and Eic Value

Assuming the 90 days horizon Voya Floating Rate is expected to generate 0.12 times more return on investment than Eic Value. However, Voya Floating Rate is 8.47 times less risky than Eic Value. It trades about 0.13 of its potential returns per unit of risk. Eic Value Fund is currently generating about -0.1 per unit of risk. If you would invest  803.00  in Voya Floating Rate on October 8, 2024 and sell it today you would earn a total of  9.00  from holding Voya Floating Rate or generate 1.12% return on investment over 90 days.

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

Voya Floating Rate  vs.  Eic Value Fund

Voya Floating Rate

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Floating Rate are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Voya Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eic Value Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eic Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental 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 Floating and Eic Value

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

The idea behind Voya Floating Rate and Eic Value Fund 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.