Correlation Between Voya Intermediate and Heartland Value

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

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

Diversification Opportunities for Voya Intermediate and Heartland Value

-0.61

Correlation Coefficient

Voya Intermediate  Heartland Value

Excellent diversification

The 3 months correlation between Voya and Heartland is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Voya Intermediate Bond and Heartland Value Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Value Plus and Voya Intermediate 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 Intermediate Bond are associated (or correlated) with Heartland Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Value Plus has no effect on the direction of Voya Intermediate i.e., Voya Intermediate and Heartland Value go up and down completely randomly.

Pair Corralation between Voya Intermediate and Heartland Value

Assuming the 90 days horizon Voya Intermediate is expected to generate 11.82 times less return on investment than Heartland Value. But when comparing it to its historical volatility, Voya Intermediate Bond is 4.4 times less risky than Heartland Value. It trades about 0.1 of its potential returns per unit of risk. Heartland Value Plus is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  3,689  in Heartland Value Plus on September 4, 2024 and sell it today you would earn a total of  324.00  from holding Heartland Value Plus or generate 8.78% return on investment over 90 days.

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

Voya Intermediate Bond  vs.  Heartland Value Plus

Voya Intermediate Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Heartland Value Plus

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Heartland Value Plus are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Heartland Value may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Voya Intermediate and Heartland Value

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

The idea behind Voya Intermediate Bond and Heartland Value Plus 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.