Correlation Between Voya Limited and Ing Intermediate

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

Diversification Opportunities for Voya Limited and Ing Intermediate

0.89

Correlation Coefficient

Voya Limited  Ing Intermediate

Very poor diversification

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

Pair Corralation between Voya Limited and Ing Intermediate

Assuming the 90 days horizon Voya Limited is expected to generate 1.16 times less return on investment than Ing Intermediate. But when comparing it to its historical volatility, Voya Limited Maturity is 2.49 times less risky than Ing Intermediate. It trades about 0.11 of its potential returns per unit of risk. Ing Intermediate Bond is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  981.00  in Ing Intermediate Bond on September 20, 2024 and sell it today you would earn a total of  97.00  from holding Ing Intermediate Bond or generate 9.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Voya Limited Maturity  vs.  Ing Intermediate Bond

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 fundamental drivers, Voya Limited is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ing Intermediate Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ing Intermediate Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Ing Intermediate 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 Limited and Ing Intermediate

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

The idea behind Voya Limited Maturity and Ing Intermediate Bond 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.