Correlation Between Vy(r) Jpmorgan and Voya Solution

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

By analyzing existing cross correlation between Vy Jpmorgan Small and Voya Solution Aggressive, you can compare the effects of market volatilities on Vy(r) Jpmorgan and Voya Solution 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 Vy(r) Jpmorgan with a short position of Voya Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vy(r) Jpmorgan and Voya Solution.

Diversification Opportunities for Vy(r) Jpmorgan and Voya Solution

0.89

Correlation Coefficient

Vy(r) Jpmorgan  Voya Solution

Very poor diversification

The 3 months correlation between Vy(r) and Voya is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Vy Jpmorgan Small and Voya Solution Aggressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Solution Aggressive and Vy(r) Jpmorgan 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 Vy Jpmorgan Small are associated (or correlated) with Voya Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Solution Aggressive has no effect on the direction of Vy(r) Jpmorgan i.e., Vy(r) Jpmorgan and Voya Solution go up and down completely randomly.

Pair Corralation between Vy(r) Jpmorgan and Voya Solution

Assuming the 90 days horizon Vy(r) Jpmorgan is expected to generate 1.57 times less return on investment than Voya Solution. In addition to that, Vy(r) Jpmorgan is 1.59 times more volatile than Voya Solution Aggressive. It trades about 0.03 of its total potential returns per unit of risk. Voya Solution Aggressive is currently generating about 0.08 per unit of volatility. If you would invest  1,114  in Voya Solution Aggressive on October 13, 2024 and sell it today you would earn a total of  375.00  from holding Voya Solution Aggressive or generate 33.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Vy Jpmorgan Small  vs.  Voya Solution Aggressive

Vy Jpmorgan Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vy Jpmorgan Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Vy(r) Jpmorgan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Solution Aggressive

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vy(r) Jpmorgan and Voya Solution

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

The idea behind Vy Jpmorgan Small and Voya Solution Aggressive 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.