Correlation Between Voya Limited and Voya Multi

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

By analyzing existing cross correlation between Voya Limited Maturity and Voya Multi Manager International, you can compare the effects of market volatilities on Voya Limited and Voya Multi 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 Limited with a short position of Voya Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Limited and Voya Multi.

Diversification Opportunities for Voya Limited and Voya Multi

0.59

Correlation Coefficient

Voya Limited  Voya Multi

Very weak diversification

The 3 months correlation between Voya and Voya is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Voya Limited Maturity and Voya Multi Manager Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Multi Manager and Voya Limited 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 Limited Maturity are associated (or correlated) with Voya Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Multi Manager has no effect on the direction of Voya Limited i.e., Voya Limited and Voya Multi go up and down completely randomly.

Pair Corralation between Voya Limited and Voya Multi

Assuming the 90 days horizon Voya Limited Maturity is expected to generate 0.08 times more return on investment than Voya Multi. However, Voya Limited Maturity is 11.78 times less risky than Voya Multi. It trades about -0.07 of its potential returns per unit of risk. Voya Multi Manager International is currently generating about -0.21 per unit of risk. If you would invest  949.00  in Voya Limited Maturity on September 24, 2024 and sell it today you would lose (1.00) from holding Voya Limited Maturity or give up 0.11% of portfolio value over 90 days.

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

Voya Limited Maturity  vs.  Voya Multi Manager Internation

Voya Limited Maturity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Voya Multi Manager

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Multi Manager International 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 Limited and Voya Multi

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

The idea behind Voya Limited Maturity and Voya Multi Manager International 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.