Correlation Between Voya Bond and Voya Small
Can any of the company-specific risk be diversified away by investing in both Voya Bond and Voya Small 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 Bond and Voya Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Bond Index and Voya Small Pany, you can compare the effects of market volatilities on Voya Bond and Voya Small 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 Bond with a short position of Voya Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Bond and Voya Small.
Diversification Opportunities for Voya Bond and Voya Small
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Voya and Voya is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Voya Bond Index and Voya Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Small Pany and Voya Bond 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 Bond Index are associated (or correlated) with Voya Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Small Pany has no effect on the direction of Voya Bond i.e., Voya Bond and Voya Small go up and down completely randomly.
Pair Corralation between Voya Bond and Voya Small
Assuming the 90 days horizon Voya Bond Index is expected to generate 0.26 times more return on investment than Voya Small. However, Voya Bond Index is 3.91 times less risky than Voya Small. It trades about -0.33 of its potential returns per unit of risk. Voya Small Pany is currently generating about -0.33 per unit of risk. If you would invest 909.00 in Voya Bond Index on September 25, 2024 and sell it today you would lose (16.00) from holding Voya Bond Index or give up 1.76% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Voya Bond Index vs. Voya Small Pany
Performance |
Timeline |
Voya Bond Index |
Voya Small Pany |
Voya Bond and Voya Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Voya Bond and Voya Small
The main advantage of trading using opposite Voya Bond and Voya Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Bond position performs unexpectedly, Voya Small 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 Small will offset losses from the drop in Voya Small's long position.Voya Bond vs. Voya Bond Index | Voya Bond vs. Voya Limited Maturity | Voya Bond vs. Voya Limited Maturity | Voya Bond vs. Voya Bond Index |
Voya Small vs. Voya Bond Index | Voya Small vs. Voya Bond Index | Voya Small vs. Voya Limited Maturity | Voya Small vs. Voya Limited Maturity |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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