Correlation Between Voya Floating and Artisan Select

Can any of the company-specific risk be diversified away by investing in both Voya Floating and Artisan Select 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 Artisan Select 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 Artisan Select Equity, you can compare the effects of market volatilities on Voya Floating and Artisan Select 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 Artisan Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Floating and Artisan Select.

Diversification Opportunities for Voya Floating and Artisan Select

0.4

Correlation Coefficient

Voya Floating  Artisan Select

Very weak diversification

The 3 months correlation between Voya and Artisan is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Voya Floating Rate and Artisan Select Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Select Equity 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 Artisan Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Select Equity has no effect on the direction of Voya Floating i.e., Voya Floating and Artisan Select go up and down completely randomly.

Pair Corralation between Voya Floating and Artisan Select

Assuming the 90 days horizon Voya Floating is expected to generate 26.7 times less return on investment than Artisan Select. But when comparing it to its historical volatility, Voya Floating Rate is 3.62 times less risky than Artisan Select. It trades about 0.01 of its potential returns per unit of risk. Artisan Select Equity is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,152  in Artisan Select Equity on October 4, 2024 and sell it today you would earn a total of  386.00  from holding Artisan Select Equity or generate 33.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	11.92%
Values	Daily Returns

Voya Floating Rate  vs.  Artisan Select Equity

Voya Floating Rate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Artisan Select Equity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Voya Floating and Artisan Select

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

The idea behind Voya Floating Rate and Artisan Select Equity 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.